In Southern California, the entrepreneurial spirit thrives and is fueled by the invaluable contributions of small, minority-owned businesses. As the president and chief executive of the Regional Hispanic Chamber of Commerce (RHCC), I am committed to empowering these communities and promoting the immense potential of Latino entrepreneurs.

The RHCC was founded in 2000 by dedicated business leaders who recognized the need for a regional organization to represent the interests of the Hispanic business community. This initiative marked the beginning of a structured network aimed at providing cohesion and strength, paving the way for programs designed to empower, enhance and educate our greater Los Angeles business community.

An integral part of our mission relies heavily on local community banks who offer essential financial services tailored to the unique needs of our local entrepreneurs. More than just lenders, they are partners that understand the intricacies of our markets and are attuned to the specific challenges faced by minority-owned businesses. Their commitment to supporting local entrepreneurs, especially during economic fluctuations, reflects a dedication that larger institutions often overlook. 

However, proposed changes from the Federal Deposit Insurance Corp. could undermine these partnerships by introducing revisions to the current brokered deposits rule that could severely limit community banks’ ability to lend. This could lead to higher interest rates and fewer loan options, which are crucial for many Black and Brown entrepreneurs, eroding future economic opportunities and the potential for new business growth.

Hispanic-owned businesses face barriers

In fact, Hispanic-owned businesses already face substantial barriers when seeking capital, even with solid credit histories. A sudden policy shift after just four years could generate unnecessary confusion and stifle the growth of diverse enterprises across Southern California. It is crucial for the FDIC to conduct a thorough analysis of how these proposed changes may impact the minority business community and the broader economic ecosystems that rely on their success.

Moreover, community banks have historically played a pivotal role in fostering economic development in marginalized areas. They create pathways to financial education, resources and opportunities that empower individuals and uplift entire neighborhoods. When community banks receive adequate support, they stimulate local commerce, create jobs and contribute to a robust economy rooted in equity and opportunity.

Access to credit is the lifeblood of entrepreneurship, empowering business owners to invest in operations, hire employees and expand their reach. Without sufficient financial backing, many local business owners may see their prospects diminish and might be forced to delay critical investments or scale back their operations. This situation not only jeopardizes their livelihoods but also disrupts the entire network of suppliers and service providers that depend on their success.

Community banks must serve all

We must advocate for solutions that preserve community banks’ ability to serve not only agricultural producers but all individuals striving to overcome economic barriers. The flexibility to maintain diversified funding sources while fostering innovative partnerships is vital for their continued stability and growth.

Here in Los Angeles County, community banks form the backbone of our neighborhoods, empowering both small business owners and aspiring entrepreneurs alike. The FDIC must reevaluate its proposed changes to protect these support systems and ensure equitable access to financial services for all.

Sandy Cajas is the president and chief executive of the Regional Hispanic Chamber of Commerce, where she advocates for, promotes, and facilitates the success of a network of Hispanic-owned businesses in Southern California and its trade areas.