In New York, supporting local businesses is more than just a simple transaction. We know that shopping locally allows our neighbors to pay their bills, stimulates our economy and breathes life into our community. Small businesses like mine in the Bronx serve as the lifeblood of our economy and reflect just how unique our borough is. That is why we need Leader Schumer and Leader Jeffries to shine a light on harmful regulations that have the potential to do real damage on our locally owned and operated small businesses.
A new rule proposed by the Federal Reserve stands as a threat to the very businesses that we must protect. This rule would increase capital requirements on banks, but will surely have unintended consequences that would directly impact the growth of our small businesses. An increase in capital requirements would force banks to practice stricter lending standards, meaning they would be less willing to provide loans to businesses that they consider risky. Additionally, if they are required to hold more capital, borrowing would become more expensive, given that banks would try to offset the cost of holding more capital by passing it down to consumers. Without any changes, this proposal will hinder the growth of our small businesses and communities. Fortunately, Federal Reserve Chair Jay Powell recently announced that the regulators will review the plan and likely make changes to the proposal.
As a small business owner myself, I am privileged to advocate for the prosperity of small businesses however I can, which is why I believe it is vital to voice the need for a review of this rule before any new rule changes are proposed. Our collective success is not only a personal joy but also a barometer of our community’s vitality. Yet, the reality is stark: small business owners rely on access to loans to launch, sustain, and expand their operations. Without adequate financing, the vibrancy of our neighborhoods would dim, shuttering doors and eroding opportunities for growth.
There are a total of 2.3 million small businesses in New York, employing 4.1 million people statewide. These numbers demonstrate that every New Yorker is directly affected by how successful our small business sector is, making these types of federal regulatory decisions should not to be taken lightly. If passed without any revisions, this rule would stifle innovation, impede job creation, and perpetuate economic inequality, particularly for communities of color historically marginalized by our financial systems.
In the Bronx, resilience runs deep. Yet, the repercussions of this regulation threaten to undermine our progress. It is incumbent upon our representatives in Washington to voice their opposition to this proposal, push for a re-proposal that addresses the unintended consequences of this rule and uphold their commitment to the small business owners, who form the backbone of our communities. For the sake of our collective prosperity, we must stand to protect small businesses in New York and across the nation, and I look to our delegation in Congress to do just that.
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Author:
Jemel Davis
Owner of JAT Security
