Monday, U.S. Reps. Ed Perlmutter, Mike Coffman and Scott Tipton introduced The Capital Access for Main Street (CAMS) Act, which they say will temporarily allow small community banks with under $10 billion in assets to spread out or amortize a portion of their commercial real estate losses over a seven-year period.
As a result, Perlmutter said in a press release, small community banks will have more liquid capital available to make business loans.
“Small businesses are the economic engine of our economy,” said Perlmutter. “Their innovation and ingenuity will help our country continue to diversify, grow and prosper. Small business owners and small banks are not looking for a bailout or a free deal. They are asking for a fair deal, to be able to compete and work out their difficulties over time. This plan is the responsible way to help small businesses weather the storm, set the foundation to rebuild our communities, and create the jobs we need to work our way back to prosperity.”
“This legislation is desperately needed to help small businesses get financing. Small businesses are the engine that drives economic growth and job creation but without access to capital that just won’t happen,” Coffman said in a prepared statement.“Small businesses are the backbone of our economy. They account for most of our nation’s new jobs, employ half of the country’s private sector workforce, and provide for half of the nonfarm, private real GDP in the U.S.,” Tipton said. “Our CAMS bill will free up much needed capital so that community banks will be able to make responsible loans to small businesses so that they can expand, creating badly needed jobs.”
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.