Congressional panel debates oversight and effectiveness of new small business lending program

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Congressional panel debates oversight and effectiveness of new small business lending program

Lawmakers on the House Financial Services Committee squeezed in one final hearing on the proposed Small Business Lending Fund Tuesday on the eve of the bill’s markup.

The hearing came just days after the Congressional Oversight Panel released a report of the controversial proposal – dubbed a sequel to TARP by its critics – suggesting that it wouldn’t do much to help ailing small businesses.

The $30 billion program would provide low-cost capital to banks that have less than $10 billion in assets. Initially, the banks would pay a 5 percent dividend on the government’s investment, but the more they lend to small businesses, the lower that rate becomes.