Melissa Bean

Ms. BEAN

Ms. BEAN. Thank you, Chairman Frank, for all your hard work on this important bill. With access to tier 1 capital, community banks that participate in this program will be able to provide small businesses with the credit they need to grow and hire.

Ms. BEAN. Mr. Chairman, it is also my understanding that you and committee staff have been in discussion with Treasury and regulators since this bill was in our committee about the intent that these investments can be counted as tier 1 capital in a manner consistent with that accorded to other capital securities issued to Treasury and that Treasury and the regulators understand Congress' intent and have noted that they have the appropriate authority to do so under the bill.

Ms. BEAN. Madam Speaker, I rise today in support of H.R. 5297 and urge my colleagues to support America's small businesses, our job creators, by voting ``yes'' on this bill. Some Members of Congress frequently talk about the importance of small businesses to our communities and our economy, yet fail to actually vote for pro-business legislation that comes before them on this House floor. Today they have the chance to act, to do something that truly provides real and immediate assistance to small business owners. The Small Business Jobs Act is one of the most important bills this year to support our economic recovery. During the small business Federal resource seminars that I hold in my district, community business owners have told me again and again that lack of access to affordable credit remains their greatest obstacle to business recovery, expansion and diversification. This critical and timely bill will help bridge that gap. Today's legislation builds on the successful provisions in the Recovery Act that helped revive small business lending and secondary credit markets. This bill provides increased SBA loan guarantees and reduced fees; and $12 billion in small business tax cuts like the net operating loss carryback, enhanced section 179 expense provisions and bonus depreciation, and eliminates capital gains taxes for small business investments. Also included is a provision I authored to allow commercial real estate refinancing in the SBA 504 program. This will help business owners with performing loans stay in their business properties that would otherwise be ineligible for refinancing due to falling values. I would now like to ask the gentleman from Massachusetts to engage in a short colloquy to clarify the capital treatment of small business lending fund investments. Over the last few months, hearings in the Financial Services Committee and many meetings that Members have had with constituents have clearly demonstrated that this kind of legislation is being called for by a broad spectrum of American small businesses and small lenders. One of the main components of the bill is the small business loan fund. Up to $30 billion in capital to small banks can be leveraged to $300 billion in loans to small businesses, our job creators, by making money for the government over 10 years. Community banks that participate in the small business lending fund will be able to support many multiples of that amount in new lending. To allow that to occur, it has always been our intent and understanding that the bank regulators should treat small business lending fund investments in all eligible institutions-- community banks, thrifts and holding companies--as tier 1 capital, in a manner consistent with that accorded to other capital securities issued to Treasury by eligible institutions and in consideration of the strong public interest in promoting lending to small businesses. It is my understanding that these investments are meant to be counted as tier 1 capital. Mr. Chairman, is that correct? I yield to the chairman.

Ms. BEAN. Madam Speaker, pursuant to House Resolution 1640 and as the designee of the chairman of the Committee on Financial Services, I call up 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, to amend the Internal Revenue Code of 1986 to provide tax incentives for small business job creation, and for other purposes, with the Senate amendment thereto, and I have a motion at the desk.

Ms. BEAN

Ms. BEAN. Mr. Speaker, I rise in support of H.R. 3199--Emergency Medic Transition, EMT, Act. As an original cosponsor and co-author of this bill, I'm pleased that policy language I authored regarding reciprocity for military emergency medical technicians can be considered today. This provision establishes reciprocity between the armed services and states regarding certification for emergency medical technicians, EMTs. In 2008, the State of Illinois passed legislation which allows military ``EMT'' training of an honorably discharged member of the armed forces to be considered as `reciprocal' for its licensure requirements. Working with Representatives Harman and Herseth Sandlin, I included a similar provision in H.R. 3199, The Emergency Medic Training, EMT, Act, a comprehensive bill that will assist our EMT vets with training, grants, and education opportunities when they arrive home. The need for such direction to states remains necessary. Our men and women in uniform should be able to use their real-time training and education in the field to help those in emergencies here at home, without the cost and redundancy of retraining upon their return. I want to thank Congresswomen Harman and Herseth Sandlin for their hard work and support of our returning EMTs as well as their efforts to bring the underlying bill to the floor. I encourage my colleagues to vote ``yes.''

Ms. BEAN

Ms. BEAN. I agree with the chairman, and I thank you for giving me the opportunity to speak on these important issues. I look forward to working with you further on it.

Ms. BEAN. I yield to the chairman.

Ms. BEAN. Thank you, Mr. Chairman, for yielding and for your thoughtful leadership and stewardship on our Nation's transportation resources and your commitment to strengthening America's competitiveness. I strongly support the renewed focus and investment in our Nation's critical rail infrastructure. Yet I continue to have grave concerns about the impacts of freight rail traffic on communities whose road infrastructure was not designed to accommodate increased levels of rail traffic. In communities in my district in Illinois, those concerns include blocked crossings that cause traffic bottlenecks; safety threats due to decreased mobility of emergency responders; safety issues due to increased car volumes and speeds; noise and air pollution; and interference with proposed commuter rail expansions. The recent acquisition of the EJ&E by Canadian National promises to significantly increase daily rail traffic. This would necessitate construction of over a dozen grade separations, like underpasses and overpasses, to ensure adequate safety and traffic flow. With each construction project estimated at costs of tens of millions of dollars, the impact of this federally approved rail transaction rises to the level of regional and national significance. Municipalities like Barrington and others along the EJ&E need DOT funding to help their communities continue to function which is why we need a multiyear surface transportation reauthorization moving forward to address such needs nationwide. While funding for grade separation construction will come from the FHA in this bill, the FRA and STB must continue to work together to align transportation and safety priorities. State and local governments cannot be expected to bear the burden of accommodating regionally and nationally significant freight movement. It's in everyone's interest that Federal agencies partner with communities to ensure the impacts of such freight are mitigated to a reasonable and practicable extent. I would like to point out that crossing hazard reduction efforts should not be limited to high-speed rail corridors. The vast majority of our rail network continues to be comprised of non-high-speed rail, regardless of maximum potential train speed.

Ms. BEAN

Ms. BEAN. Mr. Speaker, on rollcall No. 430, the Obey amendment, had I been present, I would have voted ``yes.''

Ms. BEAN

Ms. BEAN. Since the 2008 financial crisis that reduced the values of their homes and savings, our constituents have demanded action and answers. What went wrong and what will Congress do to make sure it doesn't happen again? This bill answers with strong protections for American families. The problems started in our neighborhoods where too many home buyers took out loans they couldn't afford and too many lenders approved those loans. This bill ends the period of no-doc loans and drive-by appraisals with new lending standards, with risk retention to ensure lenders want to keep those good loans on their books, and rating agency liability and reform. Next, derivatives were at the heart of the AIG failure. This bill creates regulation where it did not exist in this multitrillion market with required transparency, ensuring that these trades are exchange- traded cleared and-or reported. Capital reserves will be required to back up the risks they take and protect the entire system. And, most important, it ends taxpayer bailouts. Those companies who take risk, if you fail, you're fired. Your shareholders will lose money and the financial industry is responsible for liquidation.

Ms. BEAN. Everyone, from home buyers in our neighborhoods to wizards on Wall Street to regulators in Washington, recognizes that the era of no regulation is over. Status quo doesn't work. It's time to act and protect the American people.

Ms. BEAN

Ms. BEAN. I claim time in opposition, even though I'm not opposed.

Ms. BEAN. I yield myself such time as I may consume. I want to acknowledge Congressman Price's amendment and its recognition of the challenges facing not only community businesses seeking loans but the community bankers that are trying to provide them. His amendment recognizes mixed messages between legislators urging more lending while regulators and examiners are often urging less, particularly in the area of commercial real estate. That's why I have a bill that addresses both priorities by expanding the SBA 504 program to allow banks to lend to small businesses for owner-occupied properties, while easing the exposure on their bank's balance sheet with investments from the CDCs. I also want to acknowledge that this amendment recognizes the credit crisis that's challenging our country and our small businesses particularly, which is the point of this underlying bill. And I hope my colleague will support the underlying bill as it addresses those credit challenges. I yield back the balance of my time.

Ms. BEAN. Mr. Chairman, I yield myself 5 minutes. Mr. Chairman, our Nation's economic rebirth relies upon the ability of our community businesses to innovate, develop, and market solutions that deliver measurable value to their customers. Their success drives the majority of new jobs in our Nation. They are the engine of innovation, and their resiliency to reinvent their business models and adapt to emerging growth markets is critical. It's their creativity that drives 13 times more patents per employee than larger firms. They are the cornerstones of our economy and our communities. Beyond the goods and services and the jobs they provide, they invest in the bricks and mortar/real estate in our communities. They have supply chains that depend on their business. They do charitable giving, and they mentor young people in their communities. Congress has done much to address the challenges small businesses face. Among the $288 billion in tax breaks in the Recovery Act were crucial small business tax provisions, such as accelerated bonus depreciation and an expansion of the net operating loss carryback that has already rebated $2.8 billion to businesses across our Nation. U.S. manufacturing is growing, we're adding new jobs every month in 2010, and GPD is now trending positively, moving from a negative 6 to positive 6 in the year following the Recovery Act and it's now holding at 3 percent. But as I talk with small businesses in my district and across the Nation, the issue that has continued to be an obstacle to business expansion and diversification is access to credit. The financial crisis of 2008 severely tightened small business access to credit and affordable terms. When businesses can't access financing, they're prevented from entering into new contracts, buying new equipment, hiring new employees, and other expansions. In the worst cases, business owners must cut payrolls, go into bankruptcy, or close their doors for good. Congress has taken steps to alleviate that problem. The Recovery Act included valuable changes to the SBA loan programs, reducing fees for lenders and borrowers on the 7(a) and 504 loan programs and increasing government guarantees to attract more capital. As a result, weekly SBA loan approval volumes have increased by over 90 percent. The improvements to SBA loan programs and other measures we've taken have helped, but much more needs to be done. Earlier this year, commercial and industrial loans declined for the seventh straight quarter, down more than 17 percent from 2009, and banks are receiving mixed messages. On the one hand, Congress and the administration are urging them to lend more; on the other, bank regulators are telling them to hold back on lending. In fact, our colleague, Mr. Price, has an amendment expressing a sense of Congress on that point. In addition, banks have greater risk aversion due to their exposure on their balance sheets--stemming especially from the instability of the commercial real estate sector. That brings us to this important bill on the floor today. The Financial Services Committee has held several hearings on the restriction of credit for small business. The bill before us today builds on those hearings and was considered in the open process the committee is known for. During markup of the bill, the committee adopted 15 amendments, including seven Republican amendments, and today we will consider 17 additional amendments, the vast majority of which are to the Financial Services portion of the bill. The Small Business Lending Fund Act is a significant step to boost small business lending through our community banks. This legislation builds on the effective financial stabilization measures Congress has previously taken by establishing a new $30 billion small business loan fund to provide additional capital to community banks that increase lending to small businesses. This $30 billion investment on which the government will be collecting dividends and earning a profit per the CBO estimates can be leveraged by banks into over $300 billion in new small business loans. This is an important investment by the Federal Government in our small business that brings tremendous returns. The terms of the capital provided to banks are performance based; the more a bank increases its small business lending, the lower the dividend rate is for the SBLF capital. If a bank decreases its small business lending, it will be penalized with higher dividend rates. This legislation includes strong safeguards to ensure that banks adequately utilize available funds to increase lending to small businesses, not for other lending or to improve their balance sheet. There will be oversight consistently throughout the program, plus it requires that the capital be invested only in strong financial institutions at little risk of default and the best positioned to increase small business lending. It's important for Americans to understand that although this fund has a maximum value of $30 billion, it is estimated to make a profit for taxpayers in the long run. And the money will ultimately go not to banks, but to the small businesses and their communities that they lend to. As our financial system stabilizes and our community banks recapitalize, these funds will be repaid to Treasury with full repayment required over the next 10 years. Also included in the Financial Services portion of this bill is the State Small Business Credit Initiative championed by our colleague, Mr. Peters. The underlying bill provides $2 billion in funding for new or existing State lending programs.

Ms. BEAN. I yield myself 1 additional minute. This program provides funding for States to expand or create lending programs that use small amounts of public resources to generate private bank financing and are designed to address critical reasons why banks are having trouble making increased investments now--lack of adequate capital reserves on the part of lenders and collateral shortfalls on the part of borrowers. The State Small Business Credit Initiative is required to leverage $10 of private funding for every $1 of government funding. Many of the existing capital access programs leverage 30 private dollars for every 1 government dollar. By supporting existing programs and using an easy- to-replicate model, this program will be quickly ramped up to increase small business lending which will retain and create jobs. Small businesses are the job creators of our Nation. Supporting their ability to grow and innovate is key to a robust and stable economic recovery. I commend the leadership of Chairman Frank and Chairwoman Velazquez in bringing this package to the floor, which will provide critical support to the half of all American workers who either own or work for a small business. Mr. Chairman, I reserve the balance of my time.

Ms. BEAN. I yield 1 minute to the gentleman from Connecticut (Mr. Larson).

Ms. BEAN. I thank the congressman for his concerns, and I have similar concerns. In my home State of Illinois, we also have institutions that would like to participate but would be unable to because of the asset cap. I know Chairman Frank agrees on this point. I reserve the balance of my time.

Ms. BEAN. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Michigan (Mr. Peters).

Ms. BEAN. I yield 1 minute to the majority leader.

Ms. BEAN. Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr. Hinojosa).

Ms. BEAN. Mr. Chairman, I yield 30 additional seconds to the gentleman from Texas.

Ms. BEAN. I yield myself the balance of time. Well, first I would like to address some of the points our colleague from Missouri suggested, that all we need to do for business is less Federal action and less regulation. And on that point, I would have to agree, the minority has delivered--less action and less regulation, a culture of deregulation that led to the financial crisis and the recent oil spill in the gulf. But this bill isn't about regulation. It's about credit. And I would then like to move to the point of my colleague from Texas who suggested that this bill adds $33 billion to the national debt. That's disingenuous, as the gentleman knows. This is not a $30 billion cost, according to the nonpartisan CBO. The legislation, in fact, will reduce the deficit. Now, these funds are an investment, and there are clear safeguards that ensure that taxpayers are repaid with interest. Also, his concern for small businesses fearing higher taxes is unwarranted, as taxes are, in fact, at historic lows; and in the Recovery Act, of the $288 billion in tax cuts, many of those went to our community businesses. He also cited the NFIB to claim that access to credit is not a serious problem, yet the NFIB's own data shows that only 40 percent of small business owners attempting to borrow last year had all of their credit needs met, and nearly one-quarter of would-be borrowers, 25 percent, had none of their credit needs met. Now, he did suggest that some businesses--or he suggested all businesses--are just in a holding pattern, when the reality is, some of them are, and that's not who this legislation is directed to. There are many others who have started to see their pipeline build and their forecasts develop and are seeking to expand their operations and hire people, and they need that access to capital. This Small Business Lending Fund Act is for those who are going to grow us out of this recession. I urge my colleagues to support this important investment in those community businesses that are the cornerstone of our economy. I yield back the balance of my time.

Ms. BEAN. I just want to applaud Congressmen Driehaus, Connolly, and Moore's efforts to improve the oversight of the SBLF program. This amendment importantly expands oversight to ensure taxpayer dollars are protected. I urge my colleagues to adopt the amendment. I would further rebut our colleague from Texas' inaccurate assertion that the program is not paid for. The gentleman knows full well that it is fully paid for and that, according to the CBO, the government will earn a profit.

Ms. BEAN

Ms. BEAN. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 5297 and to insert extraneous material thereon.

Ms. BEAN

Ms. BEAN. Madam Speaker, I ask unanimous consent that the instruction in the amendment printed in part B of House Report 111-506 relating to page 11, line 8, be considered to refer to section 4(d)(2)(a) of the original-text substitute.