WASHINGTON — Banks successfully warded off a measure Thursday that would have raised the small business lending cap for credit unions, but they continue to battle a second amendment to a House-passed bill that they also oppose.
The House bill, known as the JOBS Act, would make it easier for certain small businesses and banks to fuel their expansion by raising capital, will likely come to a vote in the Senate next week. While bankers support the overall bill, they have been tussling over amendments to it.
Senate Majority Leader Harry Reid announced Thursday that there will not be a vote on an amendment, sponsored by Democratic Sen. Mark Udall, to raise the cap on business lending by credit unions. Reid’s announcement followed a strong lobbying push by credit unions to include the legislation and a strenuous push back from banks.
The Senate will vote Tuesday, though, on an amendment sponsored by Democratic Sens. Jack Reed, Carl Levin and Mary Landrieu, that the banking industry opposes.
The House version of the legislation would raise the shareholder threshold that triggers bank registration with the Securities and Exchange Commission to 2,000 from 500. But under the Reed-Levin-Landrieu amendment, which aims to provide greater protection for investors in banks and small businesses, the threshold would only go up to 750.
“The House legislation fails to strike the appropriate balance between capital formation and investor protection,” Reed said Thursday during a conference call with reporters, referring broadly to the bill, not just the provisions that apply to banks. “And without that, the markets are less markets and more casinos.”
The amendment needs 60 votes to be adopted, meaning that it would have to garner support from at least seven Senate Republicans. That appears like a long shot.
But James Ballentine, executive vice president of congressional relations at the American Bankers Association, was not ready to declare victory on Thursday.
“We hope that the Senate will really support the House bill that has come over. We think that has the broadest bipartisan support, and hopefully that will go through,” he said.
The bank provision is a relatively small part of the House legislation, which would also allow for so-called crowd-funding, allowing start-up businesses to raise capital online from small investors.
The bill passed the House last week by a 390-23 margin. SEC Commissioner Mary Schapiro has raised concerns about the legislation’s impact on investor protection, but the bill has the support of the Obama administration.