President Obama recently released additional details on his proposal to provide capital to community banks to increase small business lending. The legislative proposal would transfer $30 billion in repaid Troubled Asset Relief Program (TARP) funds to a new Small Business Lending Fund. According to the proposal, banks with less than $1 billion in assets could receive capital investments of up to 5 percent of their risk-weighted assets, and those with between $1 and $10 billion in assets could receive up to 3 percent. To participate, banks would have to receive approval from their primary regulatory authority.
