With the last big banks announcing plans this week to repay Troubled Asset Relief Program funds and the administration eyeing those funds to recycle into a jobs bill, Sen. Carl Levin, urged Treasury Secretary Timothy Geithner Tuesday to channel Tarp toward community banks.
In a letter to Geithner, the Michigan Democrat said that the Treasury needs to tweak its criteria and provide assistance to community banks to get credit flowing to small businesses.
"Unfortunately, to date, the Tarp has primarily only benefited the largest banks," he wrote in the letter, noting that larger financial institutions with assets totaling $100 billion or more only accounted for 22% of all small-business lending.
"As the administration is currently considering steps to create much needed jobs, I urge you to utilize the Tarp, which was originally intended to keep credit flowing and our economy moving, to finally do what it was intended," he said. "Smaller banks should have improved access to the program to shore up their positions, so that they may continue to lend. The Tarp criteria should be adjusted to accurately reflect the business models of these smaller banks."