[Congressional Record Volume 156, Number 103 (Tuesday, July 13, 2010)]
[Senate]
[Pages S5771-S5773]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NEED FOR BOLD ACTION
Mr. BURRIS. Thank you, Madam President.
For the past 2 years, this country has been held in the grip of an
unprecedented economic crisis. The housing market collapsed, the bottom
dropped out of Wall Street, and for the first time in generations many
Americans felt their hard-earned economic security begin to slip away.
Here in Washington, Members of the House and Senate were faced with a
harsh reality: For decades, regulators and policymakers alike had
fallen short of their responsibilities. A divisive political process
drove them to duck the tough issues and kick the can down the road time
and time again.
This failure of regulation and the absence of political will allowed
Wall Street fat cats to let their greed get the better of them. They
gambled with our economic future. They designed complicated financial
products and placed high-stake bets against them. In short, they built
a house of cards, and when it finally came crashing down, the American
economy lay in ruins.
There can be no quick fixes after a disaster of this magnitude. But
under President Obama's leadership, our elected leaders finally took
the bull by the horns and did what was necessary to stop the bleeding
and set our country back on the road to recovery. I was proud to join
many of my colleagues in supporting the American Recovery and
Reinvestment Act--a landmark stimulus bill that helped reverse the
rising tide of economic misfortune. Thanks to this legislation, we have
made some significant progress, though we still have a very long way to
go. But this is an election year, and that means partisan bickering is
in the air and it is on the rise. So I believe my colleagues and I have
a decision to make: We can focus on winning the next news cycle--
pitting Republicans against Democrats, and falling into the same tired
political battles that usually consume election years in Washington--or
we can reach for something better. We can tune out the partisan fights,
reject the failed policies that got us into this mess, and prove to the
American people that we have the will to make tough decisions.
Our recovery is far from complete. I believe if we fail to continue
the bold policies that pulled us back from the brink of disaster, if we
shrink away from difficult decisions that will move this recovery
forward, then we place our economy at grave risk of slipping back into
a recession. This is a time for bold action, not pointless ideological
battles. This is a time to move forward, not backward.
I call upon my colleagues to seize this opportunity. Let us keep
America on the road to recovery, and restore the hard-earned security
of ordinary folks who have suffered because of bad decisions on Wall
Street. It won't be easy, but it is our responsibility, and it is the
right thing to do.
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We should start by increasing our support for small businesses,
especially those disadvantaged and minority-owned businesses. These
companies foster progress and innovation. They have the power to create
jobs and direct investment to local communities, where it can have the
greatest impact. Small businesses form the backbone of our economy, but
in many ways they have suffered the most as a result of this economic
crisis.
That is why I have filed an amendment that will improve and expand
the Small Business Administration's 8(a) Program. This measure would
increase the continued eligibility amount from the current $750,000 net
worth to $2.5 million so more small businesses could benefit from this
assistance.
It is no secret that minority-owned businesses, particularly those in
poor or urban areas, have been hit hardest by the current economic
downturn. That is why these are the areas we should target for our
strongest support. By expanding the existing 8(a) program, we can
increase its economic impact without having to reinvent the wheel. We
can rely on a proven initiative to inject new life into disadvantaged
areas.
I ask my colleagues to support my amendment when it comes up for a
vote, as well as the underlying Small Business Lending Act as a whole,
which we will be debating shortly on the floor. I ask them to reject
the tired politics that got us into this mess and embrace the spirit of
bipartisanship that can lead us out.
On behalf of small and minority-owned businesses, I call upon this
body to take action in that regard. Our economic future may be
uncertain, but with my proposal, the Small Business Lending Act, we
have the rare opportunity to influence that future. So let's pass these
measures to guarantee some degree of relief for the people who continue
to suffer the most. Let's renew our investment in America's small
businesses and rely on them to drive our economic recovery. Let's do it
now. We need no more rhetoric, no more politics. Let's move forward and
help small businesses in general, minority- and women-owned businesses
in particular.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. UDALL of Colorado. Mr. President, I ask unanimous consent that
the order for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Burris). Without objection, it is so
ordered.
Mr. UDALL of Colorado. Mr. President, we are working here on the
floor of the Senate to encourage a strong economic recovery, but it
still remains clear that too many Americans are unable to find work. We
know small businesses are the real job engines in our economy, so I am
particularly pleased that the Senate is right now debating a small
business lending bill.
I rise today because I would like to further improve the bill through
an amendment that would take a simple step to safely increase lending
to small businesses. We do that mainly by getting government out of the
way so that credit unions can increase their small business loan
portfolios.
Today, in every single State of the United States, there are credit
unions that have cash on their balance sheets, and they are ready to
respond with loans for more money. There are many worthy small
businesses in communities across our country, in Colorado and Illinois,
that need the loans, but Federal law currently prohibits Federal credit
unions from fully helping our entrepreneurs. Especially in this
economy, we need to change that. We know small business expansion is
what is going to pull us out of this recession.
Small businesses have always been the job engine of our economy. In
the last 15 years, small businesses have generated nearly two-thirds of
all new jobs created in our country, and they currently employ more
than half of all Americans.
I traveled across Colorado this year and last year, as you have in
your State, Mr. President. I constantly visited with scores of small
business owners, and they continually ask me: Where is the lending? I
thought the banks were supposed to start lending again.
I heard this. I think every Senator in the Chamber has heard this.
But despite remaining profitable, small businesses have been unable to
secure the loans they need to make investments in inventory, expand,
and ultimately hire new workers. That is why I am introducing this
amendment to allow credit unions to ramp up their small business
lending without costing taxpayers a single dime.
Back in December of last year, I was joined by Senators Snowe,
Schumer, Lieberman, Boxer, Collins, Bennet of Colorado, our Majority
Leader Reid of Nevada, Specter, Bill Nelson, Sanders, and Gillibrand in
introducing the Small Business Lending Enhancement Act.
The bill would have increased lending for small business by lifting
the arbitrary cap on credit union small business loans. Why is that a
problem and why is that a cause of concern? Right now credit unions are
required to limit small business lending to 12.25 percent of their
total assets. But many credit unions have run up against that cap and
the only thing keeping them from jump-starting their local economies is
an outmoded law I acknowledged.
After introducing our bill last year, we heard from scores of banks
that were concerned about the safety and soundness of allowing credit
unions to increase their small business loan portfolios. I realize that
dealing with banking credit unions can be like injecting yourself
between the Hatfields and the McCoys, but I feel so strongly about
helping small businesses and unlocking the credit markets that I am
willing to take some lumps in the process.
I have gone back to the banks, listened to their concerns, and we
went to the drawing board. I spoke to the Senate Banking Committee,
Treasury Department, and even the credit unions' own regulator, the
National Credit Union Administration, to see if there was something we
could all agree on.
That work has paid off, which is why I am proud to introduce a new
compromise that will safely and soundly increase small business lending
by credit unions without costing Americans a dime. Best of all, this
legislation could lead to large-scale job creation in my home State of
Colorado and all around our great country.
If the Members would indulge me, I wish to explain what is in the
compromise. In response to questions about the safety and soundness of
allowing credit unions to expand their small business lending all at
once, our new proposal institutes strict eligibility criteria. Under
this amendment, the credit union must first be well capitalized.
Second, they must have offered small business loans for at least the
last 5 years; third, proof they have sound underwriting and strong
historical management practices; and, fourth, it must show they have
been running up against their previous loan cap. Credit unions that
meet all of those strict criteria then go to the NCUA, their regulator,
and apply to increase their small business lending. Then when they are
approved, that cap would increase slowly from the current 12.25 percent
to a maximum of 27.5 percent, and even that transition would be
overseen by regulators to ensure it is done in a measured and prudent
fashion.
Nobody can argue that this is irresponsible. I would challenge
anybody to tell me this is not a sound and sure-fire way to grow our
economy by increasing credit unions' capacity to lend to small
businesses. The Credit Union National Association estimates that these
sensible reforms would increase small business lending by over $10
billion a year, including--and let me talk about Colorado--an increase
of $200 million in my home State of Colorado.
This new access to credit is also predicted conservatively to produce
more than 100,000 new jobs nationwide. I think everybody would agree
this is the sort of pro-business, pro-jobs policy we need.
The small business community, led by the National Small Business
Association, the National Association of Realtors, and even chambers of
commerce such as those in Texas have even gotten behind our effort and
are now asking the Congress to pass this important provision.
We all know what shape our economy is in today. Small businesses
continue to struggle to access credit, as large
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banks have significantly cut back on Main Street lending.
Mr. President, you been here the last 18 months and you have noted, I
know, that the 22 banks that received the most funding through the
Troubled Assets Relief Program, TARP, actually have cut their
collective small business loan balance, and then America's community
banks which, by and large, did not receive any Federal bailout funds,
are still struggling to fill that Main Street credit vacuum that was
created by these large financial institutions.
We need to do better. Small businesses are counting on us all across
our country. I mentioned earlier we have all met business owners. One
Coloradan I was particularly compelled by is Stacy Hamon. Stacy is a
small business owner in Thornton, CO, who started her own business, the
1st Street Salon. Initially she went to a bank only to be turned away
because credit was in short supply, not because of any problem with her
credit history. So Stacy turned to make her dream come true to her
local credit union, and that credit union granted her a loan through a
second mortgage on her home. Since that time her salon has become even
more successful. I visited her business. I was impressed. She hired
more workers. She created real American jobs. Her story is a shining
example of the economic expansion that awaits us if we will increase
the amount of lending that credit unions can undertake.
Another Coloradan, because this is about real people who are eager to
build their business, is Lisa Herman. She e-mailed me a story about a
loan she secured from a credit union to expand her business, called
Happy Cakes Bakeshop. It is in the Highland Square area of Denver. She
has been in business since 2007. Despite a tough economy, her revenue
has been up by about 25 percent since the summer of 2008. She has
booked over 20 weddings a month, and her retail operation has expanded
to the point that she needed to build and move into a new shop.
Her traditional bank lender could not expand her credit, but her
local credit union could. She went on and expanded her business. This
meant more jobs and more business for her community. That is the
American way, is it not?
As I begin to close, some would have you believe that this is about
banks or credit unions. I mentioned the Hatfields and the McCoys
earlier. But it is about small business; not about the banks, not about
the credit unions, it is about small business.
In this kind of a climate, we cannot turn away entrepreneurs such as
Stacy and Lisa. I doubt there is a single Member of this Senate who
wants to look a small business owner in the eye who could not get a
loan because of an arbitrary government cap on small business lending.
We all have an enormous responsibility to do all we can to unlock
credit markets for small businesses in Colorado and across our country.
This amendment is an important part of that effort. I look forward to
working with all 98 of my colleagues to move this amendment, to add it
to this important small business lending package and allow our Nation's
small businesses to again set our country on a path toward job growth
and future prosperity.
I yield the floor and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Ms. STABENOW. I ask unanimous consent that the order for the quorum
call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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