Merkley, Boxer Introduce Bill to Help Community Banks Get Credit Flowing Again

Press Release

To get lending going again, Senators Jeff Merkley (D-OR) and Barbara Boxer (D-CA) introduced legislation Wednesday that will assist community banks in extending credit to small businesses and consumers, urging economic growth and assisting in job creation. By allocating existing TARP funds under a new Community Credit Renewal Fund to community banks, the Bank on Our Communities Act will allow those institutions to raise private capital and spur job growth at the local level.

"Small businesses are the engine of job creation, and community banks provide the fuel that keeps that engine going," Merkley said. "Community banks have been crushed by the financial crisis through no fault of their own, and the Bank on Our Communities Act will give them the access to capital necessary to re-start lending on Main Street."

"By increasing lending, we will not only help our small businesses grow, we will create jobs," Boxer said. "This legislation will strengthen community banks so they can get credit flowing again to small businesses and consumers."

Small businesses rely on community banks for loans, but tight credit markets have made it difficult for these local banks to raise the capital they need.

Community banks are critical to small business growth and job creation. In fact, community banks hold 11 percent of total industry assets but make 38 percent of small business and farm loans.

The legislation introduced today by Merkley and Boxer will help community banks recapitalize, on the condition that they increase the flow of credit into the economy.

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