Talk Radio News Service: News, Politics, Media

By Monique Cala University of New Mexico/ Talk Radio News Service

Rep. Nydia Velazquez, (D-N.Y.), who heads the Committee on Small Business, proposed that $30 billion from the Trouble Asset Relief Program that was supposed to go to banks to help with small business lending, go directly to the Small Business Administration instead.

“Taking $30 billion and simply handing it to banks- in hopes that they will make loans- is not sound policy,” said Velazquez. “Small businesses are our best job creators, producing 60 percent of new jobs.”

Assistant Treasury Secretary for Financial Stability Herbert Allison said that the Federal Deposit Insurance Corporation (FDIC) reported that lending by the banking industry fell by $587 billion last year.

“We must improve credit conditions for small businesses,” said Allison.

He went on to say that the $30 billion proposed by President Obama for the Small Business Lending Fund (SBLF) would create incentive for small and mid size banks to accelerate small business lending.

Though no resolution came today, lawmakers are expected to vote on the FDIC proposal, which would allow only banks making less than $10 billion to receive funds.