Small business lending is an important way that banks help meet their communities. needs, especially for the many banks that primarily focus on commercial rather than consumer lending. Many small businesses have little or no direct access to capital markets and are thus reliant on bank financing, both for operating expenses and for investment. Despite the importance of small businesses to the U.S. economy and the importance of bank lending to small businesses, there is little high quality data on small business lending by banks. The FDIC Small Business Lending Survey (SBLS) is designed to help fill in this information gap. The survey includes some questions related to consumer transaction accounts, which are responsive to a Congressional mandate.
The U.S. Census Bureau will conduct and implement the survey, and will protect the data and information collected from disclosure, in accordance with applicable law. To ensure accurate responses and to minimize the effort necessary to gather information needed for responses, in 2015 the FDIC conducted three rounds of cognitive testing of the survey questions across the U.S. in 10 states with 40 banks of different sizes and that serve different types of market areas. A sample of about 2,000 banks were selected to participate in this survey, out of a universe of around 6,500 eligible banks. The sampling methodology is a disproportionate stratified sample, with strata assigned based on each bank's asset size and type of market area.
The survey will provide insight into many aspects of small business lending, including important, heretofore unavailable, nationally representative information on the general characteristics of small business borrowers to which the banks lend, the types of credit offered to small businesses (such as closed-end loans, lines-of-credit, and credit cards), and the relative importance of commercial lending activity for banks of different sizes and business models and banks with different levels of urban or rural presence. In addition, the survey will provide new information on banks' market area for small business lending and their perceived competition, and the dimensions on which they compete. The collection is designed to complement rather than duplicate the data that is already collected on small business lending, such as information contained in the Consolidated Report of Condition and Income, or Call Report.
The questions related to consumer transaction accounts to gather information on identification and other account opening requirements and transaction costs related to entry-level consumer transaction accounts are directly responsive to the mandate in Section 7 of the Federal Deposit Insurance Reform Conforming Amendments Act of 2005 ("Reform Act") (Pub.L. 109-173). The mandate calls for the FDIC to conduct ongoing surveys "on efforts by insured depository institutions to bring those individuals and families who have rarely, if ever, held a checking account, a savings account or other type of transaction or check cashing account at an insured depository institution (hereafter in this section referred to as the 'unbanked') into the conventional finance system."
The FDIC will use the information collected from the survey to produce publicly available studies on small business lending by banks and consumer transaction accounts. In the small business lending studies we plan to explore if there are differences in small business lending practices across banks of different sizes, banks with different business models, and banks with different urban and rural presences. We will use the information on consumer transaction accounts to explore the costs and other requirements for opening and maintaining basic, entry-level consumer deposit accounts at banks, and banks. general overdraft practices for these accounts. All results will be reported in aggregate; no bank-specific information will be released.
Domestic banks of all size and from all geographic areas.
This survey is a new effort on the part of the FDIC, and is being administered for the first time.
The FDIC will release detailed reports.