Help Us Pass Wall Street Reform

Dorfman (left) in action

This morning I joined Congressman Jim Himes (D-CT) and Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce, in a press teleconference call on why passing Wall Street Reform is important to small businesses. You can read my prepared statement below and hear the entire press conference by clicking here.

The U.S. Senate might vote as early as today on cloture which would enable a final Senate vote on Wall Street reform. The House has already passed this conference committee bill so we are very close to victory.

Below are the names of U.S. Senators we are asking you to call on this issue. Please help.

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Statement by Frank Knapp, Jr., president and CEO of The South Carolina Small Business Chamber of Commerce. July 12, 2010.

The last time Margot and I were together pushing for Wall Street reform, it was April 21st of this year, in a press conference at the U.S. Capitol with Senators Dick Durbin, Jack Reed and Michael Bennet. You can watch the video of this at the bottom of this post.

Back then, we were fighting against the misinformation coming from the big financial institutions and their mouthpiece, the U.S. Chamber of Commerce, and we’re still doing it today. Even though we’ve been successful moving the ball down the field very close to the goal line, there’s one more play needed to finish.

The U.S. Chamber of Commerce does not represent the interests of small businesses that have suffered because of the irresponsible actions of the nation’s biggest banks. The greed of these financial institutions collapsed our economy and shut down loans and credit lines to our small businesses. I don’t need to recite the statistics to you. We hear macro and micro stories every day about small businesses not getting access to the money they need. And every economist acknowledges that small businesses must hire the employees we need to lead us out of this recession, just as they have in the last three economic recoveries.

But ironically, the only business sector that is apparently hiring, according to Nelson Schwartz’s New York Times story yesterday, is Wall Street. Greed is still alive and well on Wall Street. And we all know that without passing the reform that is in front of the Senate this week, greed will bring our economy down again and tear apart our small businesses if we can ever get them back on their feet.

Yet, the U.S. Chamber still wants Congress and the public to be afraid. Wall Street reform will dry up loans to small business, Tom Donohue warns. No, Tom, you’re wrong. Your big bank donors are doing pretty well right now and they aren’t doing that by making small business loans. They’re making money on Wall Street.

The U.S. Chamber pretends to be a friend to Main Street, worrying that Sam the Butcher, Joe the Orthodontist and your local car dealer will be regulated out of business. Sorry, Tom, that’s not in the legislation. What the butcher, orthodontist and car dealer want are customers—the customers who lost their jobs because of your buddies on Wall Street.

Small business supports this reform legislation, because it will restore balance between Wall Street and Main Street through fair and common sense policies. Furthermore, it will create a stable, transparent financial environment in which community banks and credit unions can once again feel secure in making loans.

We at the South Carolina Small Business Chamber of Commerce have been strong supporters of a Consumer Financial Protection Bureau to better protect consumers, which includes small businesses. We’re not afraid of good regulation that keeps us and our customers safe from financial predators.

We’re in favor of making banks be banks and not gambling houses. We have been strong supporters of the “Volcker Rule” to put the brakes on proprietary trading by banks, the practice that largely is responsible for bringing us to the brink of another Great Depression.

The South Carolina Small Business Chamber of Commerce and small business organizations across this country want the Senate to pass Wall Street Reform.

Borrowing the line from our former first lady Nancy Reagan, Congress should “just say no”—to the U.S. Chamber. The financial health of our country and our small businesses depends on it.

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Please Help By Calling These Senators Today

Below are the names of targeted Senators we are asking you to call today. Tell their offices that passing Wall Street reform is very important to small businesses. Ask the Senators to vote for cloture on the House bill.

Thanks for your help.

Grassley (R-IA) (202) 224-3744


Lugar (R-IN) (202) 224-4814

New Small Business Loans -- from Sam's Club?

You heard me tell you this before:

Image: SustainabilityNinja.com

All the economists say that small businesses must lead us out of this stalled economy by creating the new jobs that we need.

This obviously isn’t happening, since only 83,000 private sector new jobs were created last month in the entire country. (See Brad Warthen's tidy July 1, 2010 post on Sheheen and Haley's views on removing (or not) the Confederate battle flag from the State House grounds in an effort to "develop an environment that creates jobs.")

A Drop in Gov't-Backed Business Loans
If we want small businesses to grow and start hiring, we need to make sure that they can get the loans or credit lines they need to do that. One of those ways is to encourage private financial institutions to make more U.S. Small Business Administration (SBA) loans, loans largely backed by the federal government.

Unfortunately, since May, Congress has not reallocated stimulus money to the SBA loan programs that temporarily eliminated fees for these loans and increased the government guarantee up to 90 percent. As a result, the number of traditional SBA loans dropped significantly last month. (And this isn't a new phenomenon.)

A Break in the Clouds: The Community Express Loan Program
But there is good news. The SBA also has a Community Express loan program in which small businesses can more easily obtain loans from $5000 to possibly $50,000. The process is relatively easy and can be done online. There has not been a drop-off in these loans.

The problem is that awareness of the Community Express loan program is not what it should be.

So you have to hand it to big box stores. They’re always looking for an angle to get shoppers in the door or online. Usually the losers in their effective marketing schemes are the local small businesses. You might be saving a dollar on your purchase, but most of the money you fork over flows right out of your community.

You’re selling your local economy’s soul for a few pieces of gold.

Finally, one of those big box stores has found the SBA Community Express loan program and has a good idea that can actually help local small businesses.

The Retail Giant with a Heart of Gold?
Sam’s Club will soon launch a program to market the Community Express loans to all its members. To do this they’re partnering with Superior Financial Group, which is one of the two authorized SBA lenders actually making these loans (the big banks are also authorized, but they aren’t making the loans because they are too small and not very profitable.)

Obviously, Sam’s Club isn’t doing this out of the goodness of its heart. First, Sam’s Club will reportedly keep $50 from each loan. Second, it’s a marketing gimmick. You go to the Sam’s Club website, fill out the application and, the retailer hopes, you stay on the website and spend some money. Sam’s Club doesn’t really care if you get the loan or not. The $50 is just a bonus.

Still, Hats Off to Sam’s Club
Many small businesses that could use a loan to expand or just get them over a hump have no idea that Community Express loans exist. The SBA and other SBA lenders don’t have the marketing budget and reach of Sam’s Club. The giant retailer can’t guarantee that a small business will qualify for the loan, but through its marketing clout more small businesses will be aware of the program.

A Good Alternative to Fueling the Sam Walton Empire
However if you’re like me and don’t want to give Sam’s Club $50, you can apply for a Community Express loan online from Borrego Springs Bank. Call them at 866-644-0042 or go to to their website. There is no application fee, although they do have a package fee if you get the loan.

I’m sure that Borrego Springs Bank will be happy to match whatever discount you might think you’re getting through Sam’s Club. You should receive a response in about two days.