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Frank Urges SBLF Term Sheets for Mutuals, S Corps

Posted on 4/20/2011

House Financial Services Committee ranking member Barney Frank (D-Mass.) on Friday urged the federal banking regulators to affirm to the Treasury Department that its investments in debt instruments that mutual and Subchapter S institutions would issue under the Small Business Lending Fund program should be treated as Tier 1 capital.

"[I] understand that the issuance of term sheets for mutual and Subchapter S institutions has been delayed by [regulators'] concerns regarding the appropriate capital status for Treasury investments in debt instruments that would be issued by these institutions under the SBLF program," Frank said in a letter. "The record surrounding passage of the act creating the SBLF is very clear: Congress intended that investments in all institutions eligible for the program should be treated as Tier 1 capital."

He also noted that he emphasized Congress' intent during a House floor colloquy with former Rep. Melissa Bean (D-Ill.). "Mutual and Subchapter S community banks are a mainstay of our financial system, and can and will play a prominent role in reviving small-business lending to strengthen our economic recovery," Frank added.

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