WASHINGTON — Broadening the government's rescue efforts to pump more capital into smaller institutions would expand lending and help the economy recover faster, industry representatives told Senate Banking's financial institutions subcommittee Wednesday.

Arthur Johnson, the chief executive of United Bank of Michigan in Grand Rapids, called for an expansion of the Treasury Department's Capital Purchase Program, in which the government took preferred stakes in banks, and a revival of the proposed Legacy Loans Program, which would have set up a fund to buy whole loans from banks and sell them to investors.

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