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SEC's White opposes H.R. 3868.

At a Banking Committee hearing, Sen. Patrick Toomey (R.Pa.) pressed Mary Jo White, chair of the SEC, on why she has voiced opposition to a bipartisan House bill that would make it easier Business for Business Development Companies (BDCs) to invest in small and medium-sized businesses. The bill is called the Small Business Credit Availability Act (H.R. 3868), and it passed the House Financial Services Committee by a whopping bipartisan vote of 53-4. There are currently more than 80 BDCs in existence in the United States with more than $70 billion in outstanding loans to middle-market businesses (U.S. companies with $5 million to $150 million in annual revenues). Fifty-seven of the BDSs are publicly traded. The most controversial aspect of the bill is that it would increase a BDC's ability to deploy capital to businesses by reducing its asset coverage ratio, or required ratio of assets to debt, from 200% to 150% if certain requirements are met. White objected to that increase in "leverage," saying "I still have investor protection concerns."

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Title Annotation:ON THE HILL
Author:Barlas, Stephen
Publication:Strategic Finance
Article Type:Brief article
Geographic Code:1USA
Date:Sep 1, 2016
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