Regulators call for increased lending to small businesses
06 Feb 2010
The US federal financial regulatory agencies yesterday issued a statement urging banks to lend to creditworthy small business borrowers, which play an important role in the economy.
Earlier, president Obama had proposed a $30-billion small business lending fund targetted at community banks as part of his efforts to create jobs.
The congress is yet to approve the plan.
''Some of these small businesses are experiencing difficulty in obtaining or renewing credit,'' s joint statement by the Federal Reserve Board of Governors, Federal Deposit Insurance Corp., National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and Conference of State Bank Supervisors said.
The regulators are working with the industry and supervisory staff to ensure that supervisory policies and actions do not pose a threat to give credit to sound small business borrowers.
They emphasised that financial institutions that engage in prudent small business lending after performing a comprehensive review of a borrower's financial condition will not be subject to supervisory criticism for small business loans made on that basis.
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