Cummings Asks Fed Chair To Encourage Small Business Lending

United States Congressman Elijah E. Cummings
Proudly Serving Maryland's 7th District
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FOR IMMEDIATE RELEASE                     CONTACT:
April 14, 2010                                              Paul Kincaid, 202-225-4289


Cummings Asks Fed Chair To Encourage Small Business Lending
Congressman discusses small business lending with Chairman Bernanke.

(Washington, DC) – Congressman Elijah E. Cummings, (MD-07) today questioned Ben Bernanke, Chairman of the Federal Reserve, at a hearing conducted by the Joint Economic Committee. Cummings specifically questioned Bernanke regarding the opportunity for small businesses, particularly minority-owned and disadvantaged businesses, to acquire lines of credit from private lenders.

Cummings was particularly interested in this process after meeting with Baltimore-area small business owners who want to bid on contracts and hire new employees, but they are unable to find credit.

“The minority business leaders with whom I met are struggling to keep their doors open, for one simple reason: They cannot access lines of credit,” said Cummings. “These are successful, capable firms. They are shut out of the market because they cannot get a simple loan. I am incapable of exaggerating how upset I was to learn that these businesses may have to shut down because they can not maintain financing.”

In his opening statement, Bernanke said the Fed has asked banks to ensure the economy is capitalized, “We have issued policy statements to bankers and examiners emphasizing the importance of lending to creditworthy customers, working with troubled borrowers to restructure loans, managing commercial real estate exposures appropriately, and taking a careful but balanced approach to small business lending.”

Bernanke also said the Fed assisted the National Federation of Independent Business in developing a survey to assess barriers to credit access by small businesses.  The Fed is also using its Senior Loan Officer Opinion Survey on Bank Lending Practices to monitor changes in bank lending to small businesses.

Bernanke agreed with Cummings, in the moral and financial importance of encouraging American businesses, “From an empathy and from an economic perspective, it is important to get small businesses growing. We’re looking for feedback and ideas from banks and others who will give us more explicit suggestions to do that.”

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