Frank rebukes 'TARP Jr.' moniker for small-business bill

House Financial Services Chairman Barney Frank (D-Mass.) on Monday disagreed with Republicans who dubbed legislation providing loan assistance to small businesses "TARP Jr."

"This is very different than TARP," he said, adding, "I will say this, if the banks in this program repay as great as the TARP banks repaid, than we'll make money on it."

The exchange between Frank and Republicans occurred during the Rules Committee debate on the bill. The House is expected to vote on the legislation later this week, assuming it passes out of committee. 

Republicans took issue with the legislation because it grants the Treasury secretary temporary authority to make capital investments in small banks to increase the availability of credit to small businesses. 

Conservatives argued the language will allow Treasury to create winners and losers among small-business owners, a similar concern raised about larger banks seeking assistance from TARP.

Frank said so far the government has made money off banks that participated in TARP. Losses do exist on TARP payments to GM, Chrysler and AIG. 

"TARP was an appropriate response at the time," he said. 

The legislation also includes tax breaks aimed at small businesses, which were roundly supported by committee Republicans. 

The bill provides certain C corporations with a temporary tax exclusion on qualified stocks. It also offers penalty relief for small businesses that participated in certain listed transactions.