Committee Approves President Obama’s Plan to Help America’s Small Businesses
House Financial Services Committee approved key legislation designed to boost bank lending to small businesses struggling to gain access to credit due to the financial crisis.
Today, the House Financial Services Committee approved key legislation designed to boost bank lending to small businesses struggling to gain access to credit due to the financial crisis. H.R. 5297, the Small Business Lending Fund Act, will establish a $30 billion fund to boost lending to small businesses looking to hire and expand their operations by providing additional capital to community banks. The program is completely separate from TARP and mandates accountability and oversight by Congress, the GAO, and the Treasury Department’s Inspector General. The committee also adopted several bipartisan amendments today to strengthen the bill and defeated numerous amendments by Republicans designed to defeat the measure. The bill calls for the capital to be repaid by community banks over time.
In addition, the committee approved an amendment introduced by Rep. Gary Peters (D-MI) that will provide federal funding for state lending programs that use small amounts of public resources to generate substantial private bank financing. Such programs are designed to address many of the reasons banks are having trouble increasing lending to small businesses, including lenders’ desire to hold greater reserves against certain loans and concerns about collateral shortfalls on the part of borrowers.
H.R. 5297 was approved by a vote of 42-23 and now moves to the House floor for consideration. To view all the amendments considered today, click here.
“Small businesses create two in every three jobs in this country. Helping them innovate and grow has to be our top priority,” said Rep. Peters. “States are already engaged in extremely effective efforts to promote small business lending, and strengthening these efforts will create jobs across the country.”
“Small businesses are responsible for the majority of new jobs in the United States, but every day I hear from small business owners who still aren’t able to borrow. Job creation is our top priority, and we need to ensure that the businesses creating those jobs are able to invest and grow. This legislation is going to make it easier for small businesses in Cincinnati and across the country access the resources they need and continue on the path toward recovery,” said Rep. Steve Driehaus (D-OH).
“I have always championed the notion that small business success equals American success. Small businesses are truly the backbone of our economy and when I've met with small business owners they tell me stories about how lack of access to capital is crippling their growth. This bill will help create access to capital and spur prosperity in central Ohio and in communities throughout the nation,” Rep. Mary Jo Kilroy (D-OH) said.
“The small businesses that drive our local economies rely on community banks for affordable capital,” said Rep. Melissa Bean (D-IL). “While stability has returned to large financial institutions, we need this fund to help our local banks, which remain challenged in their efforts to expand loans to our job-creating businesses.”