WASHINGTON, D.C. – U.S. Senator Olympia J. Snowe (R-Maine), Ranking Member of the Senate Committee on Small Business and Entrepreneurship, last night wrote to Treasury Secretary Timothy Geithner, Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Ranking Member Richard Shelby (R-Ala.) urging them to provide strict oversight of the new $30 billion Small Business Lending Fund, which was included in the Small Business Jobs and Credit Act of 2010 signed into law yesterday by President Obama.

“As someone who has worked tirelessly in a bipartisan manner to promote policies that empower entrepreneurs to start and grow their businesses while creating jobs, I am pleased the legislation that the President signed into law includes a number of provisions adopted from numerous bills I have introduced over the course of this Congress,” said Senator Snowe.  “These provisions will help small businesses access larger Small Business Administration (SBA) loans, bolster counseling and assistance for small firms seeking to export, and reduce the tax and regulatory burdens that small businesses face. 

“Unfortunately, I opposed final passage of this bill because it includes a $30 billion Treasury lending fund that has not been fully vetted, is potentially very costly to the American taxpayer, and could damage the stability of our financial system.  Indeed, rather than initiating a new, unknown program that is likely to cost taxpayers billions, we should utilize existing, proven Federal resources, including SBA loan programs – which experienced an increase in lending of 236 percent in Maine and 90 percent nationally after the passage of critical fee relief and increased guarantee rates that several of my colleagues and I fought to include into the stimulus.

“As I have noted previously, I have serious concerns about whether the true cost of the Small Business Lending Fund, and its potential burden on taxpayers, has been taken into consideration when evaluating the program and its effect on our budget, particularly given its inclusion in the legislation without being subject to a single Senate hearing on the matter.  Additionally, the structure of this lending fund is completely counter to the measures we have taken over the past two years to improve the quality of assets and underwriting in the financial market, and could potentially lead to poor lending decisions that, in the long run, would undermine our overall financial system.
 
“Given these and other concerns I have regarding the potential for mismanagement and abuse in this new lending fund, I sent letters to Secretary Geithner and both the Chair and Ranking Member of the Senate Banking Committee, urging them to maintain a consistent and watchful eye on the new lending fund.  Specifically, I am asking the Senate Banking Committee to hold regular oversight hearings regarding the new lending facility, paying particular attention to the fund’s cost, unintended consequences, and overall effectiveness.”