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Zywicki Addresses Small Business and Real Estate Lending in Hill Testimony

Professor Todd Zywicki appeared at a February 26 joint hearing of the House Committee on Financial Services and the House Committee on Small Business to provide testimony on The Condition of Small Business and Real Estate Lending in Local Markets.

In his prepared remarks, Zywicki expressed his belief that recently-enacted and contemplated future legislation had the potential for negative impact on an otherwise well-functioning lending market, creating an environment of uncertainty that might discourage lenders.

"Unintended consequences are most likely and most severe when legislation and regulation goes beyond the modest goals of improving the market process but instead supplants individual choice through the substantive regulation of particular terms of credit contracts," Zywicki said.

Among those testifying along with Zywicki were Martin J. Gruenberg, Vice Chairman, Board of Directors, Federal Deposit Insurance Corporation; Herbert M. Allison Jr., Assistant Secretary for Financial Stability, Department of the Treasury; Federal Reserve System Board of Governors Member Elizabeth A. Duke, Governor, Board of Governors of the Federal Reserve System; and John E. Bowman, Acting Director, Office of Thrift Supervision.