House passes bill to help provide credit to small businesses

Thirteen Democrats opposed a measure Thursday that would create a $30 billion fund to boost lending to small businesses struggling to get credit.

The bill, backed by three Republicans, passed the House on a 241-182 vote. It is designed to help small businesses hire and expand operations during the economic downturn. 

Opponents of the bill called it "TARP III" and argued the legislation doesn't require banks to lend to small businesses. 

The three Republicans were Reps. Joseph Cao (La.), Mike Castle (Del.) and Walter Jones (N.C.). 

Of the 13 Democrats voting against the bill, nine are members of the Blue Dog Coalition. They include Reps. Marion Berry (Ark.), Allen Boyd (Fla.), Bobby Bright (Ala.), Jim Cooper (Tenn.), Kathy Dahlkemper (Pa.), Harry Mitchell (Ariz.), Stephanie Herseth Sandlin (S.D.), Gene Taylor (Miss.) and Mike Thompson (Calif.). The other four were Reps. Lloyd Doggett (Texas), Chet Edwards (Texas), Jared Polis (Colo.) and Dina Titus (Nev.). 

The $30 billion fund could provide as much as $300 billion in lending to small businesses, according to the Independent Community Bankers of America. 

"The Small Business Lending Fund is a fresh, bold new program that will go a long way toward aiding our nation’s economic recovery in cities and towns throughout America," said ICBA Chairman Jim MacPhee, CEO of Kalamazoo County State Bank in Schoolcraft, Mich., in a statement.

Under the bill, banks with less than $1 billion in assets could receive capital investments up to 5 percent of their risk-weighted assets. Those with between $1 billion and $10 billion in assets could receive up to 3 percent. 

Community banks would repay the capital over time. The bill is separate from the Troubled Asset Relief Program and oversight is mandated by Congress, the General Accountability Office and the Treasury Department. 

The bill is moving almost in tandem with another measure that provides tax breaks to small businesses. 

The House voted 247-170 on Tuesday to advance that bill. 

That portion of the bill temporarily excludes from taxation the sale of qualified C corporation stock, and provides penalty relief for small businesses that invest in certain listed transactions. 

It also increases taxes by limiting the use of Grantor Retained Annuity Trusts and making the highly corrosive fuel called "crude tall oil" ineligible for a cellulosic biofuel producer credit.