By Vicki Needham - 07/21/10 09:46 PM EDT
Senate Small Business Chairwoman Mary Landrieu (D-La.) said on Wednesday that her chamber will pass legislation by the end of the week. She said the bill will include a $30 billion lending pool for small businesses that provides approximately $12 billion in tax relief for these organizations.
Landreiu said the lending provision will be stripped from the original bill and then will be offered as the bill’s only amendment to illustrate who supports the pool.
“We want to highlight the fact of who’s actually stepping up to help small businesses through small banks,” she said today.
The lending pool in the small-business bill has come under fire by Republicans who contend it will create another Troubled Asset Rellief Program scenario by giving the Treasury authority over which small banks receive the funds to lend to small businesses.
While the ICBA supports the bill passed last month in the House, they are specifically opposing an amendment offered by Sen. Mark Udall (D-Colo.) that would increase the lending powers of tax-subsidized credit unions.
Under the bill, community 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, according to ICBA.
“The lending fund has important incentives to encourage greater small business lending by reducing the dividend rate community banks pay on the capital as they increase their lending,” the ICBA said in a release.