The Small-Business Lending Fund Act of 2010 (HR 5297) passed the U.S. House of Representatives on June 28, but Senate leadership pulled the bill from the Senate floor July 15 after procedural delays. Senate leaders have indicated that they may bring the bill to a final vote prior to the August break.
The original bill, sponsored by Rep. Barney Frank, D-Mass., House Financial Services Committee chairman, aims to "boost lending to small businesses by authorizing a fund of up to $30 billion that will be available to financial institutions with no more than $10 billion in assets. Bill co-sponsors say these funds can be leveraged to up to $300 billion in loans for small businesses. In addition, the bill provides another $2 billion to state lending programs that support small firms."
Small businesses employ approximately half of all Americans and account for almost 60 percent of gross domestic product.
The U.S. Department of Treasury will be responsible for the small-business lending fund, and some of the key provisions of Title 1 of the bill include:
Requires applicant institutions to deliver to the appropriate federal banking agency a small-business lending plan describing how its business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves;
Sets forth financial incentives for small-business lending by such institutions;
Instructs the secretary to require capital investment recipients to provide outreach and advertising in the appropriate language of the applicant pool using media outlets that target organizations, trade associations and individuals who represent or work within or are members of minority communities;
Establishes the Small-Business Lending Fund Program as separate and distinct from TARP. States that an institution shall not be considered a TARP recipient by virtue of a capital investment under this act;
Directs the secretary to study and report to Congress on the number of women-owned and minority-owned businesses that receive assistance as a result of the program.
To view a complete summary of the legislation, along with the full text, visit the Automotive Service Association’s legislative website. Click on the "Track Current Legislation" button in the top right corner of the home page, then scroll down to the HR 5297 link for more information.