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IBAA SUPPORTS PROPOSED SECONDARY MARKET FOR SMALL-BUSINESS LOANS

 WASHINGTON, Feb. 4 /PRNewswire/ -- A proposed secondary market for small-business loans would help stimulate the economy, but it should be structured to allow community banks to actively participate, the Independent Bankers Association of America (IBAA) said today.
 William Gossett, a member of IBAA's Bank Operations Committee, said creation of the Venture Enhancement and Loan Development Administration for Smaller Undercapitalized Enterprises would provide vital support for the small-business sector. The government- sponsored corporation, also known as Velda Sue, has been proposed by Rep. John LaFalce (D-N.Y.).
 Gossett, testifying before the House Committee on Small Business, said lending limits should be expanded so community banks could participate in Velda Sue.
 Gossett also warned that an onerous regulatory environment would hamper the ability of Velda Sue to fulfill small-business credit needs. Congress and regulatory agencies should loosen the regulatory burden that is discouraging small-business lending, he said.
 Overzealous regulation also has led to increased demand for Small Business Administration loans, but funding shortages have hindered SBA programs, he said. Congress should fully fund SBA programs, he added.
 "A more reasonable regulatory climate, as well as some increased SBA funding, could bring supply and demand back into balance," Gossett said. "A well-functioning Velda Sue program could also play a vital role."
 IBAA is the only national trade association which exclusively represents the interests of the nation's community banks.
 -0- 2/4/93
 /CONTACT: Steve Verdier of the Independent Bankers Association of America, 202-659-8111/


CO: Independent Bankers Association of America ST: District of Columbia IN: FIN SU:

DC -- DC027 -- 3049 02/04/93 13:54 EST
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Date:Feb 4, 1993
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