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ICBA Banker Outlines Small Business Lending Concerns at Senate Roundtable

Voices Strong Support for Proposed $30 Billion Small Business Lending Fund

Washington, D.C. (June 8, 2010)—William Loving, executive vice president and CEO of Pendleton Community Bank in Franklin, W.Va., will represent the Independent Community Bankers of America (ICBA) in a roundtable being held today by the Senate Small Business Committee. Loving will urge the Senate to advance the proposed Small Business Lending Act of 2010 (H.R. 5297) and discuss the damaging impact of a harsh regulatory environment on small business lending.

“America’s small business sector is the lifeblood that drives the stability and prosperity of local economies in cities and towns throughout America,” Loving said. “Community banks like mine take tremendous pride in working with local small businesses to help them remain stable and grow both in good times and in bad. Our nation’s nearly 8,000 community banks are poised to step up to the plate and further aid in the economic recovery and job creation by continuing to lend to local small businesses on Main Street. The proposed Small Business Lending Fund is a fresh, bold new program that will help interested community banks do just that.”

Community banks are prolific small business lenders, responsible for a vast amount of the nation’s small business loans. If the Small Business Lending Fund is enacted, it could provide a powerful incentive for a bank to increase its small business lending. In fact, community banks could leverage the $30 billion fund to extend as much as $300 billion in new small business credit to local customers.

ICBA is pleased that the proposal includes many features the association sought that will make the program more attractive to community banks. In particular, it appears to completely avoid onerous Troubled Asset Relief Program (TARP) restrictions, such as warrants, compensation restrictions, bank dividend restrictions and restrictions on generally available tax incentives. Such punitive conditions would only discourage participation and available small business credit.

To maximize the program’s impact, ICBA suggests restoring the value of lost Fannie Mae and Freddie Mac preferred shares to help replenish bank capital and support more lending to small businesses; ending overly aggressive exams by regulators that choke off credit; and extending the FDIC’s Transaction Account Guarantee (TAG) program.

For more information and to read ICBA’s letter to Senate leaders about the Small Business Lending Fund, visit www.icba.org.