The U.S. House of Representatives June 17 passed the Small Business Lending Fund Act of 2010 (H.R. 5297), which would create a $30 billion Small Business Lending Fund aimed at increasing community banks’ small-business lending. The bill is based on a proposal the administration sent to Congress in May.

The House approved the NSBA-supported Small Business Lending Fund Act in a 241-182 vote, with 13 Democrats voting against it and three Republicans voting in support of it.

The proposed Small Business Lending Fund would offer capital to small- and medium-sized banks (defined as those with assets of less than $10 billion) under terms providing “strong incentives” to increase their small-business lending. For more information on the proposal, please click here.  
 

Following the bill’s passage, a parliamentary procedure was used to merge it with the Small Business Jobs Tax Relief Act of 2010 (H.R. 5486), which the House approved on June 15.

This combined bill will be considered under a different name by the Senate. The Senate is expected to consider the legislation as part of its forthcoming small-business jobs bill (“Jobs 3”).

The Senate’s “Jobs 3” package also is expected to include the Small Business Job Creation and Access to Capital Act (S. 2869), which would extend the small-business provisions of the American Recovery and Reinvestment Act (ARRA) through 2010.

It also would increase the loan limit on 7(a) loans from $2 million to $5 million, on 504 loans from $1.5 million to $5.5 million, and microloans from $35,000 to $50,000. For more information, please click here. 

“Jobs 3” also is expected to include an additional $12 billion in various tax cuts. 

 Amendments

The House also approved 16 amendments to the Small Business Lending Fund Act, including several supported by NSBA.

An amendment offered by Reps Walt Minnick (D-Idaho), Mike Simpson (R-Idaho), Suzanne Kosmas (D-Fla.), Michael Quigley (D-Ill.), and Kenny Marchant (R-Texas) would make non-owner occupied commercial real estate loans eligible for the program was approved.

Introduced by Reps. Ed Perlmutter (D-Colo.), Luis Gutierrez (D-Ill.), Ron Klein (D-Fla.), and Steven Kagen (D-Wis.), an amendment allowing small banks to amortize losses or write-downs on commercial real estate loans over a 10-year period also was approved.

The House also passed an amendment proposed by Rep. Bruce Braley (D-Iowa) that would require the U.S Department of the Treasury (Treasury) and the U.S. Small Business Administration (SBA) to implement various plain-language requirements, especially for documents relevant to the obtainment of a benefit or service under the bill.

Reaction

The Independent Community Bankers of America (ICBA) praised the House’s passage of the bill, saying “ICBA applauds the House for passing this vital legislation… The legislation … will help interested community banks access capital to increase their lending to small businesses … and keep credit flowing on Main Street.”

President Barack Obama and Treasury Secretary Timothy Geithner also applauded the bill’s passage, with Geithner commenting, “The Administration urges the Senate to take swift action on a package of measures to support small businesses and looks forward to working closely with Congress as they move to finalize this legislation.”

The response was not universally positive, however. Many House Republicans opposed the bill’s passage. Rep. Virginia Foxx (R-N.C.) spoke for some when she claimed, “It's really just another bank bailout. What you are doing is, you're creating government.”