Small Business Jobs and Credit Act of 2010

Floor Speech

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Mr. PRICE of Georgia. Madam Chair, I want to thank the chairman of the committee and the ranking member for working with me on this amendment. And although, as they know, I am opposed to the underlying bill, this amendment is extremely important to highlight the serious problem of mixed messages that financial regulators are sending to our community banks. And I appreciate the support of the chairman on this amendment.

Banks in Georgia employ almost 50,000 people and hold $276 billion in assets. Most of these banks are community institutions, which were mere bystanders to the financial and liquidity crisis of the last 2 years.

Late last week, the Treasury Department reported that TARP will cost less than they originally estimated. In fact, Treasury expects to spend less than the $550 billion of the $700 billion authorized. Regrettably, this figure does not factor in the bailouts for Fannie Mae, Freddie Mac, and AIG.

But even so, this is a revolving taxpayer bailout fund, meaning that there is $550 billion that the administration and leadership could put towards small business lending. However, the administration chose not to do this and, instead, wants Congress to appropriate another $33 billion of taxpayer money. That's right, another $33 billion.

Certainly, small business lending is a priority for banks and businesses. However, this bill doesn't address the underlying causes of contraction in lending but invests much more in a failed regulatory agency.

Unfortunately, the mixed messages being sent by failed bank regulators will not be fixed. Instead of making the FDIC and the other regulators send a clear, consistent message to our Nation's banks, this Congress feels that throwing more money at the problem will fix it.

In February, bank regulators, both State and Federal, issued a joint statement providing guidance to banks and to credit unions, encouraging them to make loans to credit-worthy small business borrowers. The regulators described the guidance as intended to ``emphasize that financial institutions engaging in prudent small business lending after performing a comprehensive review of a borrower's financial condition will not be subject to supervisory criticism for small business loans made on that basis.''

However, reports from the field show a much different picture. I hear from bankers in my district and across our State that there is capital to lend. However, I also hear from those same banks that they're nervous and anxious about the unpredictable regulators' response and scrutiny of their regulatory capital ratios and loan requirements. For many banks, it's easier and better just to ride out the storm by hoarding their cash than to justify every penny that they lend to the regulators, possibly risking their capitalized standing.

Banks cannot hold capital for regulatory compliance and comply with regulators' instructions to lend at the same time. They're mutually exclusive. My amendment states that these mixed messages sent by the regulators are a very serious problem and a cause of the contraction in small business lending and are destructive to communities.

In order to highlight this, I urge adoption of the amendment.

I reserve the balance of my time.

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Mr. PRICE of Georgia. I thank the gentlelady for her support of the amendment and would just point out, once again, the mixed messages that are being received by our community banks.

I would also like to point out that the amount of money left available in TARP right now could easily cover the intent of this bill. However, this bill has in it an extra $33 billion, $33 billion, Madam Chair, that, frankly, we do not have as a Nation. We put it on backs of our kids and grandkids and borrow it from some other nation when we could be utilizing money that has already been appropriated for the same positive purpose.

I urge adoption of the amendment.

I yield back the balance of my time.

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