WASHINGTON, DC – Today, U.S. Senator Maria Cantwell (D-WA) secured a commitment from Treasury Secretary Timothy Geithner to get capital flowing to community banks to ensure they can give out job-creating loans to small businesses and individuals. Community bankers and small business owners in Washington state and around the country are outraged that their government is willing to help the big banks but not them, Cantwell told Geithner during today’s Senate Finance Committee hearing. While Congress could act quickly on President Obama’s proposal to move $30 billion to community banks, Cantwell said, immediate action is what is needed, because the economy cannot wait.
“If we don’t implement change right now, we are going to lose more jobs,” Cantwell told Geithner. “Do not wait for legislation. Come to terms with the community banks on reasonable terms that they can agree to … and I think that that we will be well on our way to getting Americans back to work.”
Geithner responded: “I agree with you, the president agrees too. And we’re happy to work with you and your staff on the best ideas of how to do that.”
[Click here to watch a video of the exchange.]
Cantwell said the federal government’s Troubled Asset Relief Program (TARP) for big banks, put in effect in the fall of 2008, failed to get capital flowing to small businesses or homeowners. In his State of the Union Address, President Obama proposed redirecting to community banks $30 billion in loans repaid by big banks under TARP. Since then, Senator Cantwell has called for immediate enactment of the proposal thorough executive action, not through slower-moving legislation the Administration has called for. The president already has the authority, Cantwell said. She urged Geithner to listen to Main Street, and cited some of the stories she is hearing daily from constituents in Washington state:
· A high-tech company with a performing line of credit pulled by Bank of America and then told they had 30 days to repay half a million dollars. The CEO even took himself off payroll for a year to keep his employees on; · A retired state employee with no debt, a credit score over 800 and a $400,000 home that is entirely paid off, yet has been denied credit by 25 banks; · A popular restaurant whose credit line was frozen after the Bank of Clark County was taken over by the FDIC; · The FDIC then declined to renew Vancouver, Washington business Columbia Gem’s line of credit.
Washington state constituents, Cantwell said, “are coming into my office everyday with these stories. I would urge you and the administration to act now.”
Cantwell has introduced three bills in the past six months to strengthen financial regulations, prevent market manipulation and forestall a recurrence of the financial collapse.