Doug Altner of the Ayn Rand Center for Individual Rights reports Home Depot co-founder Bernie Marcus and Subway founder Fred Deluca saying they couldn’t have started their businesses in today’s regulatory environment. In an interview with John Allison — president of the Cato Institute and the former CEO of BB&T bank — about the Dodd-Frank Act of 2010, Allison said: “Dodd-Frank and the related regulatory reaction have caused a tightening of lending standards for small businesses. This is because Dodd-Frank and the regulators’ interpretation of it mean that bank loans are based totally on mathematical formulas. Small business lending is part science and a lot of art. If banks cannot practice the art, the only thing banks can do is tighten their lending standards. Lending standards for small businesses are the tightest that they have ever been in my 40-year career…There are thousands and thousands of promising businesses that simply could not get a bank loan today that could have gotten one ten years ago.” MHProNews knows this echoes the sentiments of an MH industry lender who stated: “The larger mega park owners can surround themselves with quality experienced lending talent, law firms that have experience in consumer collections and bankruptcy laws, as well as a good software platform that is compliant with all current and changing lending laws,” while smaller independent operators are being squeezed out by regulatory compliance challenges. See this last quote in its full context at this link, and our exclusive follow report on captive finance in today’s regulatory environment at this link. ##

 

(Photo credit of John Allison: Ayn Rand Center for Individual Rights)