Government Lending
Much like congressional Democrats and President Biden’s administration answering inflation with more reckless spending, their reaction to decades of failed direct lending programs is to create more. Te $4.3 trillion reconciliation bill moving through the House calls for $4.5 billion for direct loans through the 7(a) program. Using EIDL’s fraud numbers, we can expect $1.35 billion of that to be handed over to bad actors. On top of that, Democrats are now putting the government in direct competition with the smallest financial institutions here in Missouri and nationwide.
When COVID shut down the country, Congress created the Paycheck Protection Program and turned to financial institutions and bankers like you to help save the economy in Missouri and across the country. As you well know, banks, community development financial
institutions and minority deposit institutions worked day and night to assist millions of small business owners who were fighting with every ounce of their energy to survive and keep their workers employed. Now these very institutions have a new, very powerful competitor: the federal government.
To be clear, we’re not talking about multinational banks with unlimited resources and teams of lawyers and lobbyists. We’re talking about the community banks serving small towns in rural America and minority depository intuitions who disproportionately serve minorities and customers in underserved areas. Tey are the cornerstones of their local economies, but they could soon be in the crosshairs of a government that doesn’t have to follow its own regulations and has no problem with throwing away taxpayer dollars for the appearance of “public service.”
As the ranking member of the Small Business Committee, I am doing everything in my power to put an end to government direct lending. My Republican colleagues on the committee and I are draſting legislation to reform the SBA, a key aspect of which is stripping their direct lending authority. Many loan guarantee programs have been successful, particularly for small and disadvantaged businesses. Tat is where the government’s authority should end. I feel confident that private sector and industry experts like you are more than equipped to handle the rest. History has shown too many times that the government’s shortcomings end with American citizens paying the price. It needs to stop.
Congressman Blaine Luetkemeyer represents the Third Congressional District of Missouri. He serves on the House Financial Services Committee, as ranking member of the Subcommittee on Consumer Protection and Financial Institutions and ranking member of the House Committee on Small Business.
THE MISSOURI BANKER 13
A push continues in Washington, D.C., to require financial institutions to report detailed information on customer bank accounts to the IRS. Contact your lawmakers to voice your opposition to any new IRS reporting that leads to increased compliance costs, damages your customer relationships and threatens customer privacy. Visit
mobankers.com for details.
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