The Small Business Administration (SBA) Office of Advocacy has submitted a letter to Federal Reserve Board Chairman Ben S. Bernanke and Director Sandra F. Braunstein requesting a delay in the April 1, 2011 implementation of changes to Regulation Z involving loan officer compensation and steering on the grounds that a compliance manual was never issued by the Federal Reserve. SBA's Office of Advocacy is an independent voice for small business within the federal government and is the watchdog for the Regulatory Flexibility Act (RFA). Advocacy advances the views and concerns of small business before Congress, the White House, the federal agencies, the federal courts and state policy makers.
SBA Advocacy is requesting additional time for businesses to comply with the changes to Regulation Z considering the compliance guide was not available at the time of publication of the rule.
The SBA letter to Bernanke and Braunstein, co-authored by Winslow Sargeant Ph.D., Chief Counsel for Advocacy and Jennifer A. Smith, Assistant Chief Counsel for Economic Regulation and Banking, voices SBA Advocacy's concern that a compliance guide has yet to be written by the Federal Reserve Board for the changes to Regulation Z. A compliance guide is mandated by the Small Business Regulatory Enforcement Fairness Act (SBREFA).
According to the letter: "Advocacy has reviewed the Board's Web site. Advocacy recommends the Board for having a SBREFA compliance guide page on its Web site. However, although there are compliance guides for Regulations C, D, E, F, H, I, J, L, M, O, P, R, V, X, AA, BB, CC, DD and GG, Advocacy was unable to find a compliance guide for Regulation Z."
The SBA letter further states the difficulty and expense involved with performing the requirements of the rule-making without proper guidance from the Fed. "Without proper guidance," the letter continues, "a small entity could develop new business models, reprogram equipment and re-train staff only to learn that the steps taken do not comply with the new regulations."