Bernanke, lawmakers back plan to spur small business loans

Federal Reserve Chairman Ben Bernanke touted a program to promote small business lending. 

The plan, outlined by President Barack Obama in early February, would shift $30 billion in Troubled Asset Relief Program funds into a lending fund that would encourage small and community banks to loan to small businesses. 

Bernanke is willing to work with Congress to get small to medium sized banks talking about increasing loans to local small businesses, he told a Congressional panel Wednesday. 

California Democrat Loretta Sanchez said it "seems like a disconnect" that banks are getting their money cheaper but are still restricting lending to businesses and individuals. 

Sanchez and Bernanke agreed to bring stakeholders together and "work out ways to have those conversations" to spur more lending. 

The White House proposal, which would have to be approved by Congress, would provide incentives to banks with assets under $10 billion, which officials say account for more than 50 percent of all small business loans nationwide.