NEWS RELEASE
Feb. 2, 2010
ABA Media Contact: Peter Garuccio    
(202) 663-5452
E-mail: pgarucci@aba.com

ABA STATEMENT ON ADMINISTRATION’S SMALL BUSINESS LENDING INITIATIVE

by Edward L. Yingling, ABA president and chief executive officer

            “The American Bankers Association supports the President’s goal of improving the lending environment for small businesses, and we appreciate the initiative to provide additional capital to community banks that volunteer to use it to increase small business lending.  Small businesses are the lifeblood of their local communities and ensuring they have access to credit will help create jobs and drive economic growth.  Even in this difficult economic environment, banks are continuing to lend, though both lenders and borrowers are taking a more prudent approach to credit.

            “A key factor to the proposal is removing it from association with the rules and restrictions of TARP.  Hundreds of banks that had never made a subprime loan or had anything to do with Wall Street problems took TARP capital with their regulator’s encouragement, even though they did not need it, so they could bolster their lending and financial position.  Then within weeks, they were demonized and subject to after-the-fact restrictions. Banks will be disinclined to participate if this new program is under TARP or if there is any possibility of TARP-related stigma being attached to it. 

             “Other important issues involve the need for regulatory approval prior to participation and ensuring that as many banks as possible will be eligible for the program.  It remains a very difficult environment for community banks to raise capital and that affects their ability to lend.  We are hopeful that these issues can be addressed and look forward to working with Congress and the administration to make this program viable.”


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The American Bankers Association brings together banks of all sizes and charters into one association. ABA works to enhance the competitiveness of the nation's banking industry and strengthen America’s economy and communities. Its members – the majority of which are banks with less than $125 million in assets – represent over 95 percent of the industry’s $13.3 trillion in assets and employ over 2 million men and women.