FOR IMMEDIATE RELEASE:
May 10, 2010
KAGEN CO-SPONSORS ‘
Capital Access for
As co-chair of the Congressional Business Owners caucus, Dr. Kagen co-sponsored the Capital Access for Main Street (CAMS) Act, which was introduced late last week and would help these small businesses on
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CAMS will temporarily allow small banks with under $10 billion in assets to amortize their losses on commercial real estate over a seven-year period. As a result, these small community banks, which provide many of the loans to our small businesses, will have more liquid capital available to make responsible loans.
“Small businesses drive our economy,” continued Kagen, “and it is impossible to continue to create the jobs we need without them. This bill will enable our community banks to quickly extend capital to our small businesses and communities, which is critical to our economic recovery. In turn, these small businesses will be able to retain and hire new employees.”
The TARP Congressional Oversight Panel estimated banks hold approximately $1.4 trillion in commercial real estate debt coming due over the next three years. The current rules require banks to write down all of this debt all at once, which reduces the bank’s available capital and impairs its ability to lend to small businesses.
Amortization was used during 1980s to deal with the significant strain banks experienced from the agriculture industry and helped the participating banks weather the storm.
The Capital Access for Main Street Act will help small businesses, which account for approximately 70% of all new jobs created.