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Prepare to Serve Veterans in November; Action on SB 1235; Turn to Federal Issues

In this Must Know…

Are You Serving Veteran Entrepreneurs?

How does your organization support entrepreneurship among military families?

CAMEO’s WOVEN program – Women Veteran Entrepreneurship Network – offers year-round community events to foster new businesses. Veterans Day is an excellent time to promote your business development classes and special programs for veterans, military spouses and caregivers. Join us for tips on how to engage more military-connected business owners in time for Veteran’s Day and Veteran’s Small Business Week (November 5-9). Hint: don’t ask them if they are a veteran or not. Find out what to ask instead.

Register for our Serving Veteran Entrepreneurs webinar on Thursday, September 20, 2018, at 2:00 pm. We’ll also leave time for attendees to share best practices on what you are doing to serve veteran entrepreneurs.

  • Melanie Rae, CAMEO’s WOVEN Program Director and founder/author of Guided Business Plan
  • Alicia Ogozlay, WOVEN Member, US Air Force, owner, Exclusive Beauty (invited)
  • Melissa Washington, founder, Women Veterans Alliance
  • Mike McGrane, VP, Regional Lending Director, Veterans Launch

Entrepreneurship offers veterans increased opportunities to maximize their strengths and skills, to achieve their financial and career goals, and to customize their employment to accommodate their challenges. Microbusiness and self-employment are often the most appropriate option for returning veterans because of the technology available and the flexibility afforded.

Take Action: Tell Governor Brown to Sign SB 1235

The California small business truth-in-lending bill that we have been working on passed with a bipartisan vote! However, SB 1235 still needs to be signed by the Governor. Please send a letter ASAP to Governor Brown asking him to sign SB 1235 (click for a template). Email to leg.unit@gov.ca.gov and cc hpickman (at) microbiz (dot) org.

If Governor Brown signs the bill, it becomes law on January 1, 2019. Next week after his climate summit, he’ll be signing bills until September 30, 2018. Please get your letters in now!

Turning To Federal Issues

We’ve spent a lot of time this year focusing on state issues with the small business truth-in-lending bill and the state investment in small business development. Since Congress returned from their summer break, federal attention to small business has heated up. Without further ado – “modernizing” the CRA, Community Advantage changes, Tax Reform 2.0, action on retirement savings, appropriations update, CFPB gets a new leader, and more. So much!

Community Reinvestment Act proposed changes

On August 28, the Office of the Comptroller of the Currency (OCC) announced a proposed set of rule changes to the CRA. The stated purpose of these rule changes is to “strengthen and modernize the CRA,” but the changes will weaken the law. Some of the proposed changes include :

  • Grading banks using a single ratio of a bank’s community investments rather than the current three-pronged approach that looks at lending, investments, and services would make it harder to analyze the effectiveness of banks’ efforts in meeting specific community needs.
  • Expanding the definition of CRA-qualifying activity to include services the banks already provide won’t address the credit needs of underserved communities.
  • Giving credit for CRA investments outside the banks’ assessment areas would disconnect the CRA from its intended purpose of benefiting historically-marginalized communities.

Read more on our blog: The CRA Is Under Threat – With It, Crucial Investments in Low-Income Communities.

Community Advantage

The September 12 Federal Register announces the extension of the Community Advantage (CA) Pilot Program to September 30, 2022 (from March 31, 2020.) While that sounds like good news, important changes were made to the program effective on October 1, 2018, that aren’t great for California. “… SBA is issuing this Notice to extend the term of the CA Pilot Program, to mitigate risks of the program by placing a moratorium on accepting new CA Lender applications (emphasis mine), to limit fees that can be collected from an applicant for a CA loan, and to revise other program requirements.” The reason given for the moratorium on new Community Advantage lenders: Increased risk of CA loans compared to other 7(a) loans and a sufficient number of geographically dispersed CA lenders. Comments from stakeholders are due by November 13, 2018, and may be submitted one of several ways as described in the Federal Register, including the Rulemaking Portal and standard mail or courier services.

Tax Reform 2.0

The IRS has proposed regulations on the new 20% small business tax deduction that was included in the first round of tax reform. Now, Tax Reform 2.0 is floating around The House of Representatives. Estimates say it would cost between $657 billion and $2.8 trillion over 10 years over a decade. The pieces related to small business include: make individual tax cuts, as well as the $10,000 cap on state and local tax deductions, permanent; allow start-ups to deduct more costs; and expand retirement savings options for small businesses, building on the President’s Executive Order (see below).

CAMEO is part of a coalition of 776 national and state organizations that oppose a second round of tax cuts that will, like the previous cuts, largely benefit the wealthy and jeopardize funding for Social Security, Medicare, Medicaid, education, and other investments in our country’s infrastructure – as well as increase the deficit.

Retirement Savings

President Donald Trump signed an Executive Order on Strengthening Retirement Security in America. The Order directs the Labor and Treasury Departments to consider regulatory changes that would make it easier for small businesses to pool resources to offer employees workplace retirement accounts (called “multiple employer plans” or “MEPs”), among other provisions.

About 55 million Americans don’t have access to the employer-based retirement plans that have a tax-advantage by taking out of pre-taxed wages that provide retirement security. Employees at small businesses and contingent workers are especially vulnerable. We hope that the specific proposals that come from this Executive Order will help those populations that need it most.

Maybe the Feds want to look toward California who will be piloting their CalSaver’s program. Download a CalSavers brochure to learn more about our state’s new retirement savings program for private sector workers.

Track Your Legislators

Prosperity Now has an Advocacy Center where you can find information on your legislators and how they voted on issues that affect small business and the asset building community:

  • Visit https://prosperitynow.org/take-action and scroll down to the Advocacy Center.
  • Click the “My Legislators” button. If you are new to the Advocacy Center, enter your contact information on the next page.
  • Select the legislator from the drop-down menu (state and federal legislators are listed).
  • Explore! Read the legislator’s bio, voting record, key issues and more.
  • Reach out! Use the advocacy center to send a quick email, tweet or phone call to your legislator.

Other Federal Happenings

  • Appropriations: We had word that the House and Senate were in the reconciliation process for the budget items for the SBA, Treasury, and USDA, but now there’s reason to believe that legislators will pass a Continuing Resolution through December 7, 2018.
  • CFPB Director: The Senate Banking Committee confirmed Kathy Kraninger for CFPB Director. Kathy Kraninger has indicated that she intends to continue Mick Mulvaney’s policies. Under Mulvaney’s watch, the CFPB has moved steadily away from its mission, dropping crucial cases against companies with abusive predatory practices.
  • Two Workshops: The Office of the Comptroller of the Currency (OCC) will host two workshops – Credit Risk and Operational Risk Workshop – at the Holiday Inn San Francisco-Golden Gateway, San Francisco on November 6-7, 2018 for directors of national community banks and federal savings associations supervised by the OCC.

The Goodies

New opportunities for training, conference information, funding, scholarships, and other information that have crossed our desks since the last Must Know. I have posted a running tab of current Industry Goodies on the CAMEO website that lists items that were in past emails. Check it out to make sure you’re not missing anything, like grants whose deadlines are still alive!

CAMEO in the News: Read CAMEO’s op-ed with Small Business Majority – Another Voice: Truth-in-Lending bill would benefit California’s small businesses.

Disaster Prep Resources: Download Operation Hope’s Personal Disaster Preparedness Guide and FEMA’s Emergency Financial First Aid Kit (EFFAK).

For Your Clients: Samaschool’s 1-hour Gig Economy Essentials training is newly available on the web to anyone! It covers critical topics like freelancing vs. employment, where to find freelance work, and how to attract clients.

New Report: Accion and Opportunity Fund conducted a study to understand how small businesses perform after receiving capital from mission-based lenders. They tracked 500 clients to observe sustainability, sales, profit, and employment capability. Some of the highlights: the majority of small businesses that obtain loan funds from mission-based lenders remain in business 2-3 years after receiving capital; over 50% increased in sales and profits, and small business owners who received loan funds experienced increased feelings of competence and confidence. The findings present a case for the importance of mission-based lenders to the goal of creating financial inclusion for underserved entrepreneurs.

New Report: The new 2018 State of Women-Owned Businesses Report commissioned by American Express does a fantastic job of measuring successes. Four out of every 10 businesses in the United States is now women-owned. It also shows us the challenges. Women-owned businesses still see only 4.3% of total revenues and 8% of all employment.

Professional Development: Opportunity Finance Network will hold Executive Training for CDFI Board Members on Thursday, September 27, 2018, in Jacksonville, FL. This is an executive-level course designed to strengthen high-performing CDFI board leadership.

Professional Development: Join NALCAB’s National Training and engage with a diverse group of network experts who believe that Juntos Somos Más/Together, We Are More. The training will be held October 1-4, 2018 in San Antonio, Texas. NALCAB’s training serves as a platform to share and learn about innovative and culturally relevant best practices for application in the communities that they serve.

Professional Conference: The 34th OFN Conference – “CDFIs: Agents of Change” – takes place October 8-11, 2018 at the Marriott Marquis Chicago.

Professional Conference: Join CalNonprofits for their policy convention – Nonprofits Standing Up for California – on Thursday, October 18, 2018, in Los Angeles. The agenda includes a discussion on Census 2020 and a keynote by Vu Le, the creator of NonprofitAF.com.

Professional Development: CALED is partnering with the California Academy for Economic Development, Fresno State, and the University Business Center, to bring you the Introduction to Economic Development Certificate Program (click the link for the agenda and more information.) The class will be held October 22-25, 2018 in Fresno.

Professional Conference: Save the date for Asset Funder’s Network Annual Bay Area Asset Building Conference on November 1, 2018, in Oakland.

For Your Clients: The U.S. Small Business Administration is now accepting nominations for its 2019 National Small Business Week Awards, including the annual Small Business Person of the Year. The deadline is January 9, 2019.

For Your Clients: Greenlining invites you to take the 2018 Survey of U.S. Latino Business Owners. Every year, the Stanford Latino Entrepreneurship Initiative (SLEI) surveys thousands of Latino business owners across the country to measure the critical impact Latino entrepreneurs have on the U.S. economy. Let your clients know that if they fill out a survey, they will have a chance to win a $50 Amazon gift card (for completed surveys).

New Report: Emergent Research released “MBO Partners State of Independence in America,” a study which offers insights into the growth of the independent workforce.

New Resource: The California Reinvestment Coalition has released a guide for banks on how to better serve immigrant communities.

New Resource: Credit Builders Alliance released Achieving Credit Strength: A Toolkit for Supporting Returning Citizen Entrepreneurs.