[Congressional Record (Bound Edition), Volume 156 (2010), Part 1]
[House]
[Page 1303]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            COMMUNITY BANKS

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Washington (Mr. Larsen) for 5 minutes.
  Mr. LARSEN of Washington. Madam Speaker, small businesses are the 
number one source of new job growth in our country, and their success 
will be critical to our Nation moving out of economic recession and 
toward recovery. One of the key drivers of small business success is 
access to capital. Unfortunately, the credit crunch has prevented them 
from accessing the capital they need to grow and to create jobs.
  The Recovery Act and Small Business Administration lending programs 
such as 504 loans, 7(a) loans, and America's Recovery Capital, or ARC 
loans, are helping to stem the tide of job loss and getting our economy 
moving again, but more needs to be done. In order to expand the 
availability of credit to small businesses, we must strengthen our 
community banks to allow them to lend to deserving small businesses.
  Our Nation's community banks play a vital role in small business 
lending, but the financial crisis has hamstrung their ability to make 
these loans. I look forward to seeing how the administration's Small 
Business Lending Fund proposal will help our local community banks 
provide loans to give small businesses access to the tools they need to 
build their own businesses and to start hiring again.
  I have heard from many community banks in my district that Federal 
regulatory policies are also inhibiting their ability to lend. These 
banks are struggling because Federal regulators are requiring them to 
increase capital above already well-capitalized levels and shrink their 
balance sheets. As a result, they are forced to restrict their lending 
activity in order to meet these standards. So I have urged the Treasury 
Department and the FDIC to review the effect that the current 
regulatory environment has on community bank lending in order to ensure 
an appropriate balance between prudent and necessary regulation and a 
robust lending market.
  In northwest Washington, the state of commercial real estate is also 
threatening their economic recovery. Community banks in my district 
have been devastated by these troubled real estate loans. This problem 
must be addressed so that we can free up much-needed capital for our 
banks to jump-start their small business lending.
  While I appreciate the FDIC's October guidance on prudent commercial 
real estate loan workouts, I am concerned that this guidance is not yet 
working to stabilize the CRE market. The Treasury Department and FDIC 
must take further measures to address this problem and ensure the 
guidance is fully implemented. I urge my colleagues to address this 
problem head-on so we can help our community banks lend to small 
businesses, which will in turn create jobs and launch us on a path 
towards long-term economic growth.

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