Waterloo business owner wins lawsuit over discriminatory lending
An eastern Iowa businesswoman who took on the Consumer Financial Protection Bureau and won is hoping her story helps other Iowans.
Last summer, ReShonda Young of Waterloo joined a lawsuit with a group of others against the CFPB. They claimed the agency wasn’t following the Dodd-Frank Act requirements that are in place to reduce discrimination against women and minority-owned small businesses.
It was during the process of trying to open her own business when Young learned how hard it is for hopeful minority business owners to get the capital needed to get started.
“I had a regular hourly income, my personal expenses were pretty low so it wasn’t like I couldn’t cash infuse from my personal if I needed to, my credit score was good, but I couldn’t get what I needed,” Young said.
Young started helping other minority women get their small businesses off the ground, then she realized they were also hitting credit barriers.
“It prompted me to say okay, something needs to happen,” Young said.
Young joined a lawsuit against the Consumer Financial Protection Bureau as a member of the Main Street Alliance, a network that helps small business owners across the county.
“Enough of the disrespect, enough with the blatant disrespect, when a bank says 'we don’t want your business for any good reason, why don’t you move your accounts elsewhere,'" Young said. "It was at that point, okay something has to be done."
In under a year the case was settled. In February, the CFPD agreed to step-up it’s enforcement of the rule.
“It felt just really great to be part of something that is way bigger than me, way bigger than the local banks, not that they won’t have some consequences," Young said. "It's way bigger than them."
Young said she hopes this ruling can help women like her looking to start their own business.
“I just hope that, as the CFPB starts to collect the data, that they will just have a more equal opportunity to start their business with the capital that’s needed, based on the data that’s real, not just what they look like,” Young said.
The CFPB and their attorneys did not immediately respond for comment but did agree in the settlement to increase rulemaking related to this issue.