H.R. 5297, the Small Business Lending Fund Act, would create a $30 billion Small Business Lending Fund in Treasury to boost small business lending by injecting capital into the community banks with assets of $10 billion or less. Under the program, community banks that receive funding would be rewarded for increasing small business lending, and penalized if they fail to increase small business access to credit.
“Small businesses are the backbone of our economy. Even as larger businesses have begun to increase staff, small business continues to decline, as credit from banks remain unavailable. We must support effective efforts to promote small business lending, so these companies can grow and hire,” Hinojosa said.
The program is unrelated to the Troubled Asset Relief Program and mandates accountability and oversight by Congress, the GAO and the Treasury Department’s Inspector General. The committee also adopted several bipartisan amendments to strengthen the bill, including one by Hinojosa in his capacity as chairman of the Congressional Rural Housing Caucus, to ensure that banks, small businesses and residents in rural America benefit from the legislation. The bill calls for the capital to be repaid by community banks over time.
Hinojosa added, “This legislation is going to make it easier for small businesses in the Rio Grande Valley and across the country to access the resources they need to survive, develop and thrive to help our great country continue on the path toward recovery,”
H.R. 5297 was approved by a vote of 42-23 and now moves to the House floor for consideration.