Obama’s Community Bank Lending Program May be a Slow Go

Durping his State of the Union speech earlier this week, President Obama announced his plan to reallocate $30 billion of the money paid back by the large banks under the TARP plan to smaller community banks.

The plan is to re-direct these funds to small businesses in economically challenged regions.

Only stronger community banks will be allowed to access these funds, which will likely range from 3% to 5% of the bank’s capital.  Only banks with less than $10 billion in gross assets will be eligible for a slice of the $30 billion.

In addition to getting a green light from Congress, the additional challenge is whether the community banks and/ or the local small businesses will be financially sound enough to loan or borrow under this proposed program.

Read more in the following Wall Street Journal link:

http://finance.yahoo.com/loans/article/108707/surge-in-loans-unlikely-from-small-business-plan?mod=loans-personl_smallbiz&sec=topStories&pos=6&asset=&ccode=

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