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IBAA URGES CONGRESS TO MAINTAIN SBA LOAN GUARANTEE PROGRAM

 WASHINGTON, May 27 /PRNewswire/ -- Scaling back funding to the Small Business Administration (SBA) guaranteed loan program would be like the federal government shooting itself in the foot, the Independent Bankers Association of America (IBAA) told Congress today.
 IBAA President-Elect John Shivers told the House Committee on Small Business that reducing funding is merely a short-term deficit-reduction ploy that would prove to be costly in the long run. While the House on Wednesday approved $181 million in supplemental SBA appropriations for fiscal year 1993, he urged Congress to also provide adequate funds for fiscal year 1994.
 "While overregulation of banks has forced caution on the banking industry, the SBA guaranteed loan program has allowed a considerable number of banks to continue making job-creating loans," said Shivers, chairman/president/CEO of Southwest Bank in Fort Worth, Texas. "It is ironic that, now that there is widespread recognition that small businesses are the primary source for job creation, one of the most accessible and efficient sources of small business funding has been shut down."
 Shivers urged Congress to reject a Clinton administration proposal to reduce the guarantee on loans from an average of 81 percent to an average of 75 percent. A lower guarantee level would drive deserving credits out of the SBA system and lower the amount banks could lend to a single customer.
 Shivers also urged rejection of an administration proposal to charge a 50 basis point fee on the unpaid guaranteed principal balance for sales to the secondary market. The additional fee would discourage smaller working capital loans, and high-volume participants in the secondary market would simply pass on the extra cost to borrowers.
 IBAA is the only national trade association that exclusively represents the interests of the nation's community banks.
 -0- 5/27/93
 /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: EXE

MH-TW -- DC017 -- 2945 05/27/93 12:10 EDT
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Publication:PR Newswire
Date:May 27, 1993
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