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Are We Talking About the Same Thing?

By: Kari English

When you say there is a disconnect between the federal government and community bankers most people assume you are referring to mixed signals Washington and the regulators have been sending about lending more vs. increasing capital reserves. But I found another example of this disconnect: The Small Business Lending Fund Act of 2010.

President Obama presented the idea of a small business fund in February and signed the bill in late September, commenting, “I’m thrilled to be here on what is an exciting day.” Now, banks with less than $10 billion in assets have access to $30 billion in funds, distributed by the Treasury, to increase their small business lending. In addition, certain small businesses will have access to about $12 billion in tax cuts and other benefits.

In a similarly positive statement after Senate passage of the bill, Sen. Chris Dodd, D-Conn., said, “This important bill will give small businesses and entrepreneurs access to the capital and credit they need to grow and create jobs. It will ensure that Connecticut’s small businesses have the ability to expand and innovate, hire new workers and strengthen our economy.”

One component of the small business lending act, the State Small Business Credit Initiative, is modeled in part after the Colorado Credit Reserve Program. Colorado Gov. Bill Ritter also praised the bill saying, “Small businesses are the job-creating engine of our economy … This new lending program — coupled with the Colorado Credit Reserve Program — will help drive our economy forward and give small businesses the kind of support they need to survive and thrive.”

Unfortunately, community bankers don’t seem nearly as excited.

“Any experienced banker is not going to take this,” Bernard Clineburg, CEO of the $2 billion Cardinal Bank in Fairfax, Va., was quoted as saying in a Sept. 23 MarketWatch article.

In a similar fashion, Buddy Roemer, president and CEO of Business First Bank, told the Greater Baton Rouge (La.) Business Report in an Oct. 4 article, “It’s almost like a nonevent. It’s not going to help us at all. It isn’t going to have an effect because we have money to lend. We just lend it to people who can pay us back.”

To read what other community bankers around the country are saying about the Small Business Lending Fund, click below.

General Information About the Small Business Fund

What Bankers Are Saying About the Small Business Fund

Kari English is senior editor of BankNews.

Copyright © November 2010 BankNews Media