The Small Business Banking Conference Palm Beach Gardens, FL

Karen G. Mills Senior Fellow, Harvard Business School Former Administrator of the U.S. Small Business Administration

November 9th, 2016

WHAT WILL BE THE IMPACT OF THE PRESIDENTIAL ELECTION?

Wall Street Journal

Credit Union Times 97%

84%

American Banker

Wall Street Journal

2

WHAT IS CHANGING IN THE SMALL BUSINESS LENDING LANDSCAPE? REGULATORS

Federal Reserve

SMALL BUSINESS LENDING

Federal Deposit Insurance Corporation

TRADITIONAL Department of the Treasury

Office of the Comptroller of the Currency

Consumer Financial Protection Bureau

Banks Credit Unions

ONLINE

WHAT IS CHANGING IN THE SMALL BUSINESS LENDING LANDSCAPE? REGULATORS

Federal Reserve

Federal Deposit Insurance Corporation

SMALL BUSINESS LENDING

? TRADITIONAL

Department of the Treasury

Office of the Comptroller of the Currency

Consumer Financial Protection Bureau

ONLINE

? Banks Credit Unions

WILL THE ELECTION CHANGE THE SMALL BUSINESS LENDING LANDSCAPE?

?

? Federal Reserve

Department of the Treasury

Federal Deposit Insurance Corporation

Office of the Comptroller of the Currency

Consumer Financial Protection Bureau

Banks Credit Unions

WHY WORRY ABOUT ACCESS TO CREDIT FOR SMALL BUSINESSES? Small businesses account for half of U.S. jobs 30 Million Small Businesses

Non-Employer ~24M

Employer 5.8M

97%

High-Growth ~.2M

Suppliers ~1M

84%

Main Street ~4M

Other ~.6M

Source: Author’s analysis of data from the U.S. Census Bureau.

6

SMALL FIRMS HIT HARDER IN THE CRISIS Job losses in small firms accounted for 60% of total job losses 1500

Quarterly Net Job Change (in 000s)

1000 500 0 -500 -1000 -1500

-2000 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Small (