Congresswoman Ileana Ros-Lehtinen (R-FL) voted today to allow community banks to provide more loans to small businesses. The "Small Business Credit Availability Act", H.R.3336, is yet another attempt by the House of Representatives to improve the stalled economy by making it easier for small businesses to have access to capital.
This small business friendly bill promotes more credit for small and mid size businesses by increasing community banks' capability to manage their risks as long as they do not pose a systemic risk to the banking system.
This will reform the Dodd Frank Act which restricted the ability of small community banks, along with major Wall Street institutions, to use derivatives and other financial tools. While this is needed for major firms, community banks should be excluded since they do not pose a risk to the overall system. This bill would also help reduce the amount a business may pay in interest over the life of the loan and protect them from variable interest rates.
Said Ros-Lehtinen, "My constituents back home all tell me the same thing: it is nearly impossible to be approved for a loan in today's credit crunch and they are rightly upset over the fact that banks are not lending. The purpose of this legislation is to exempt community banks from the restrictions imposed by Dodd Frank on major Wall Street firms. Community banks provide the bulk of the loans for our small businesses, which are the workhorses of the U.S. economy. The House continues approving legislation to improve economic growth but the Senate needs to act, and it needs to do so quickly. Sadly, time is not on our side and the American people expect better from their elected representatives."