The Official Online Newspaper of NAHB
The Senate last week began debate on a bill that would establish a $30 billion lending program for small businesses. While prospects for passage of the bill are uncertain, the chamber did vote on a procedural motion to include the new lending fund in the overall small business bill.
In a legislative victory for NAHB, the House last month voted 418 to three to ensure that builders would have the same access as other small businesses to the loan program created by H.R. 5297, the Small Business Lending Fund Act of 2010.
With NAHB expressing strong opposition, the Senate leadership late on Thursday, July 22, found just enough votes to move forward on an amendment offered by Sens. George LeMieux (R-Fla.) and Mary Landrieu (D-La.) that includes the fund but does not allow it to be used to provide construction loans to small builders.
In a “key vote” letter sent to every member of the Senate, NAHB stressed that without language providing equal access to this program for the nation’s small builders, the amendment does not adequately address the small business lending concerns currently facing the nation. NAHB noted that housing was the first sector hit by the current economic crisis, and that recovery cannot be sustained without a revival of the housing industry.
Debate on this amendment, and the overall bill, will continue as the Senate wraps up work this week in preparation for its August congressional recess.
NAHB will continue to fight for the inclusion of construction loans in the Senate bill. Even without affirmative Senate language on this issue, the association has the decisive House vote to ensure that any final legislative package will address the housing credit needs of the home building industry.
NAHB Government Affairs staff will continue to lobby strongly for this critical provision in the coming weeks.
Hoyer Urges Action in the Senate
House Majority Leader Steny Hoyer (D-Md.) told the NAHB leadership on July 16 that builders needed to urge their senators to pass H.R. 5297 as approved by the House.
Speaking before the NAHB Executive Board’s summer meeting at the National Housing Center in Washington, D.C., Hoyer said that the $30 billion in capital the legislation would give community banks to expand small business lending could be leveraged into $300 billion in new spending.
“Our economy cannot recover in an environment in which 45% of small businesses seeking loans are turned down, which happened last year,” said Hoyer.
That is not because they are a bad credit risk, he added, but rather that banks are worried about making loans in the current economic climate and believe they need to keep their reserves up to avoid scrutiny from federal regulators.
To spur the economy, Hoyer said the government needs to take stimulative steps in the short term to create jobs and make sure that sufficient capital is available to the business community.
“This must be accompanied by a credible and detailed plan to tackle our structural deficit once the economy has recovered,” he said.
Hoyer also said housing plays a critical role in the American economy, contributing 16% to GDP in good times.
“I know what a large stake you have in our economic recovery,” he said. “Your stake is our stake. You are a lagging industry right now. That is not good for you, it’s not good for people who need housing and it’s not good for our country.”
To read the legislation, click here and enter H.R. 5297 in the box at the upper center of the page.
For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144.