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Yarmuth Introduces Major New Legislation to Move TARP Funds From Wall Street to Main Street

(Washington, DC) Today, Congressman John Yarmuth (KY-3) announced the introduction of the Give Credit to Main Street Act – new legislation that would require $20 billion in low-interest loans be made available to small businesses throughout the nation. Using money previously set aside for Wall Street financial institutions and big banks via the Troubled Asset Relief Program (TARP), the bill redirects funds to the Small Business Administration (SBA) to provide direct lending to small companies.

“Small businesses drive economic growth and employ 50 percent of our nation’s workforce. But, even with the assistance of the Troubled Asset Relief Program, big Wall Street banks are not lending,” said Congressman Yarmuth. “We need to put Main Street ahead of Wall Street – and the bill I have introduced will give small businesses loans at the same low rate the big banks enjoy, ensuring they have the resources they need to grow and create jobs.”

The introduction of Congressman Yarmuth’s legislation coincides with President Obama’s meeting today with CEOs from some of the nation’s largest banking interests, in which the President will encourage the banking industry to unfreeze lending to small businesses.

Of the 22 banks that received the most TARP funding, three provide no small business loans at all. Over the past six months, total small business lending by these 22 banks dropped by more than $10.5 billion while SBA loan guarantees are projected to drop by $10 billion this year.

The Give Credit to Main Street Act would make loans available directly to small businesses through the Small Business Administration. Loans would be made with interest accumulating at the federal funds rate, which currently stands at 0.25 percent, with interest-only payments required for the first two years.