Statements On Introduced Bills And Joint Resolutions

Floor Speech

BREAK IN TRANSCRIPT

By Mr. MERKLEY (for himself and Mrs. Boxer):

S. 1822. A bill to amend the Emergency Economic Stabilization Act of 2008, with respect to considerations of the Secretary of the Treasury in providing assistance under that Act, and for other purposes; to the Committee on Banking, Housing, and Urban Affairs.

Mr. MERKLEY. Mr. President, I join today with Senator Boxer of California to introduce legislation that will help create jobs by getting credit flowing to small businesses and consumers.

Small businesses employ half of the Nation's workforce and are key to creating jobs. Sadly, they have been hit hard by the credit crisis. Less than one-third of small businesses report that their credit needs are being met today, and 59 percent of them now rely on credit cards to finance their daily operations, up from 44 percent at the end of last year. We urgently need to speed credit to small businesses so that they can create jobs and grow the economy. The best way to do so is through the thousands of community banks located across our Nation.

Community banks are essential to small business lending. Our Nation's 7,500 community banks of under $1 billion in assets hold 11 percent of our Nation's assets, but they make 38 percent of our Nation's small business loans by asset. Due to the current economic recession, these responsible, well-regulated institutions have seen their capital bases shrunk and have been forced to reduce lending, which negatively impacts surrounding businesses and communities. These institutions can help us turn our economy around if we give them the capital they need to increase the flow of credit to small businesses and entrepreneurs.

The Bank on Our Communities Act will help get capital to community banks--on the condition that they restart lending. The bill empowers the Secretary of the Treasury to redeploy up to $15 billion in TARP into a new Community Credit Renewal Fund. Community banks of $5 billion in assets or less can qualify for investment by the Fund if they conduct an internal stress test to determine the amount of capital they need to remain well-capitalized during adverse economic conditions and restart small business and consumer lending and raise at least 50 percent of that target recapitalization amount from private investors. Once in receipt of their new capital, participating banks would be required to increase small business and consumer lending by at least the amount provided by the Fund and to increase small business lending in particular by at least 5 percent over the lowest point in 2009. Additional incentives are given to increase lending to credit-worthy businesses above the minimum levels required for program participation.

This bill is common sense legislation with common sense values. It will give the folks on Main Street the same access and opportunity as those on Wall Street and create much needed jobs in the process. I ask that my colleagues join me in the effort to help small businesses thrive in our local communities and get our economy back on track.

BREAK IN TRANSCRIPT

Source