[Congressional Record Volume 156, Number 91 (Thursday, June 17, 2010)]
[Extensions of Remarks]
[Pages E1127-E1128]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               SMALL BUSINESS JOBS AND CREDIT ACT OF 2010

                                 ______
                                 

                               speech of

                        HON. SHEILA JACKSON LEE

                                of texas

                    in the house of representatives

                        Wednesday, June 16, 2010

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 5297) to 
     create the Small Business Lending Fund Program to direct the 
     Secretary of the Treasury to make capital investments in 
     eligible institutions in order to increase the availability 
     of credit for small businesses, and for other purposes:

  Ms. JACKSON LEE of Texas. Mr. Chair, I rise in strong support of the 
Small Business Lending Fund Act of 2010, H.R. 5297. I would like to 
thank Chairman Barney Frank, co-sponsors of the bill, and the Members 
of the Committee on Financial Services for supporting this important 
legislation. I believe this bill is critical to the continued economic 
growth and stability of the nation. Small businesses represent one of 
the most important segments of the U.S. economy. The health of the 
nation's small businesses is directly tied to the health of the U.S. 
economy. The latest Census Bureau data for small businesses indicate 
that over 4 million small businesses employ more than 20 million 
employees. Small businesses accounted for approximately 18 percent of 
private sector jobs in 2006, but nearly 25 percent of net employment 
growth from 1992 to 2005. The contribution of small businesses to the 
national economy, particularly during the economic recession, was 
crucial to creating jobs and promoting economic recovery in many parts 
of the nation.
  This bill recognizes that there has been a dramatic decline in 
lending to small businesses, as a result of the worst recession in our 
history. According to a February 2010 report of the Federal Deposit 
Insurance Corporation (FDIC), total bank loans and leases declined for 
the sixth straight quarter, with total loans to commercial and 
industrial borrowers declining 4.3 percent and real estate construction 
and development loans declining by 8.4 percent. These are not positive 
indicators for the small business sector, because without access to 
credit and working capital it is virtually impossible for small 
businesses to grow or to hire. Jobs must continue to be our number one 
priority and small businesses create jobs.
  As liquidity in U.S. financial markets evaporated during the economic 
recession, many businesses, particularly small businesses, found it 
difficult if not impossible to secure loans to keep their businesses 
operating. Meanwhile, banks have imposed more stringent lending 
requirements and eliminated or decreased substantial lines of credit, 
even when the businesses are up-to-date on their loan repayments. Of 
course, the nation's minority-owned and women-owned businesses, which 
have always cited access to capital and credit as their number one 
problem, have only had their problems compounded by the lack of small 
business lending in many parts of the country.
  According to Treasury Secretary Geithner, ``banks have been told to 
maintain capital levels in excess of those required to be considered 
well capitalized. Some banks say they have little choice but to scale 
back lending, even to creditworthy borrowers, and the most recent 
Federal Reserve data shows banks are continuing to tighten lending 
standards for small business.'' Given this type of assessment by our 
Secretary of the Treasury, it only makes sense for Congress to take 
radical steps to reverse the trend and to stimulate the most important 
sector of the economy--the small business sector.
  Others have documented the small business lending dilemma. For 
example, the TARP Congressional Oversight Panel's May 13, 2010 
Oversight Report (``COP Report'') addressed the issue of small business 
lending. ``The COP Report concluded `small business credit remains 
severely constricted', and also noted the difficulty smaller banks have 
had in providing small business credit due to exposure to commercial 
real estate and other liabilities.'' Whether small business credit 
liquidity is a supply problem, or a demand problem, no one can really 
say. What is clear is that small businesses in every part of the 
country, including my 18th Congressional District, are strapped for the 
financial resources necessary to run their businesses. Now the oil 
spill in the gulf region has worsened matters for small businesses in 
many gulf coast communities and my 18th Congressional District, where 
businesses rely on seafood from the gulf for their survival. Many of 
these businesses were crying out for help before the crisis and will 
only cry louder for help because of it. The Jackson Lee-Cao amendment 
will make sure the small business lending is targeted to these gulf 
coast communities.
  The Houston District SBA office serves 32 counties in Southeast Texas 
where there are over 340,000 small business establishments. The leading 
categories are Health Services, Business Services, Wholesale Trade-
Durable Goods, and Food and Beverage Establishments.
  At the beginning of 2006, the State of Texas reported 706 banks and 
thrifts. There are 231 participating lenders belonging to the SBA 
Houston District. However, many of these SBA lenders are not lending to 
small businesses.
  Among the 10 most populous metro areas, Houston ranked second in 
employment growth rate and fourth in nominal employment growth. Much of 
this growth can be directly attributed to small businesses. In 2006, 
the Houston metropolitan area ranked first in Texas and third in the 
U.S. within the category of ``Best Places for Business and Careers'' by 
Forbes. Small businesses made these rankings possible.
  However, I would submit to you that each of these indicators, 
particularly the one documenting the number of small businesses in the

[[Page E1128]]

Houston District, will not improve if the small business lending crisis 
continues. Small businesses in every category in Houston will be 
eliminated permanently, resulting in the loss of jobs, incomes and 
economic stability. Of course, the administration acknowledges this 
problem, and proposed establishing the $30 billion lending fund and the 
State Small Business Credit Initiative to allocate funding to states to 
support Capital Access Programs. The Obama administration also supports 
expansion of many of the current SBA programs, as well as tax 
incentives to stimulate the small business sector. Any comprehensive 
package of initiatives designed to support small business is the best 
solution to keep the small businesses of our Nation generating jobs and 
creating income. H.R. 5297 is one element of the comprehensive package 
we need right now to provide much needed capital to small businesses 
and the fund has enough safeguards to ensure the lending truly benefits 
small businesses.
  Ladies and gentlemen, I believe we have reached an impasse when its 
comes to small business lending in our country, and the only way to 
send a strong signal to the small businesses and the banks that lend to 
them is to pass legislation that will help to ease the liquidity 
crisis. This bill is a timely well-crafted measure to assist the 
Nation's small businesses. I urge you to support H.R. 5297.

                          ____________________