Washington D.C. – U.S. Senators Jeff Merkley (D-OR) and Barbara Boxer (D-CA) today praised President Obama’s commitment to help small businesses by taking $30 billion of the money Wall Street banks have repaid the Troubled Asset Relief Program and using it to help community banks give small businesses much-needed loans.
It’s an idea Merkley and Boxer advanced in the “Bank on Our Communities Act” – legislation introduced last October to help stabilize both small businesses and community banks.
The full text of the letter is below:
January 28, 2010
The Honorable Timothy Geithner
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Secretary Geithner:
We were pleased to hear President Obama’s proposal to take $30 billion of the money Wall Street banks have repaid the Troubled Asset Relief Program (TARP) and use it to help community banks extend much-needed credit to small businesses. It’s an idea we advanced in legislation introduced last year to help stabilize the health of both small businesses and community banks.
Small businesses have generated 64 percent of the new jobs created over the last 15 years. It is critical that we support our small businesses in order to jumpstart our economic recovery and create new jobs for Americans.
That is why we introduced Senate Bill 1822, the “Bank on Our Communities Act,” last October. This bill would amend the Emergency Economic Stabilization Act to ensure that the needs of small businesses and community banks, not just large Wall Street institutions, are addressed in our economic strategy.
Specifically, the legislation would transfer TARP funds to a new Community Credit Renewal Fund. Monies in this fund would be set aside to support viable community banks that commit to increase their business lending. Community banks that increase small business lending by a greater amount than their target level would receive additional financial incentives from the Treasury. Only community banks with under $5 billion in capital would be eligible for the program.
While we will keep pushing to pass our legislation in this Congress, we believe that the Treasury already has administrative authority to independently implement many provisions of the Bank on Our Communities Act. We were pleased to see the President’s support for the basic principle of S. 1822 – that we should support community banks that commit to increasing small business lending. As the Administration moves forward in fleshing out the details of this proposal, we urge you to consider the tough requirements on bank lending and the incentives for increased lending that were included in our legislation.
Even as some of our largest Wall Street banks post record profits, bank loans to businesses have fallen by more than 15 percent over the past year – and hundreds of community banks are threatened with failure. We believe that the policies in S. 1822 offer a way to address this imbalance, and we appreciate the Administration’s commitment to move forward on these issues.
We stand ready to work with you to accomplish these important goals.
Jeff Merkley Barbara Boxer
United States Senator United States Senator