Small Businesses Blame Wall Street, Favor Transparency In Financial Dealings
Written by Resources for Entrepreneurs Staff
Small Business Majority study shows that more than two out of three small business owners support tougher government oversight of financial institutions.
Small businesses aren't ready to forgive and forget when it comes to Wall Street. Although the small business community tends to oppose stricter government regulation, an overwhelming majority of entrepreneurs now favor laws designed to provide greater transparency in financial and business dealings.
Citing a study by Small Business Majority, a recent UPI report revealed that 80 percent of small business owners believe that financial companies should be subject to rules that hold them accountable for the kinds of practices that caused the recession.
"We're starting to dig out of recession," said John Arensmeyer, CEO of the Small Business Majority. "Small businesses, along with our economy, are getting stronger, but they're certainly not immune to the lingering effects of our financial meltdown."
As a result, small business owners are demanding transaction transparency, clear rules, fair business practices and oversight forcing large institutions to play by the rules, Arensmeyer added.
Other findings from the Small Business Majority study include:
- 84 percent of business owners support the Consumer Financial Protection Bureau. The CFPB is a watchdog agency that was created by the 2010 Dodd-Frank Act to monitor abusive lending practices.
- Two out of three survey respondents said that government oversight for financial institutions either needed to be increased or was adequate. A minority of small business owners felt that there is too much oversight of financial sector firms.
- Approximately 60 percent of owners feel like Wall Street firms left small companies and consumers vulnerable because they created their own rules while engaging in questionable business activities.
Consumer protection is an important issue for small businesses because many entrepreneurs fund their companies with consumer credit or credit cards. Although entrepreneurs would prefer using personal savings to start a business, tight capital conditions and anemic savings accounts mean that many small business owners will depend on consumer credit -- and greater financial sector transparency -- well into the foreseeable future.
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