By Vicki Needham - 06/17/10 06:45 PM EDT
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.