The Senate began consideration Tuesday of legislation to establish a $30 billion small-business lending fund.
The Senate voted 66 to 33 to take up the measure. It is unclear if the Senate would finish the bill before the Fourth of July recess.
The measure would create a $30 billion fund to provide capital to community banks. Banks would see their dividend on the capital reduced as they increased small-business lending. For example, if a bank boosted lending by more than 10%, the dividend would drop from an initial 5% rate to 1%. The program would also be free of some of the restrictions of the Troubled Asset Relief Program, such as warrants and executive compensation limitations.
The House passed the bill on June 17 by a vote of 241 to 182. Much of the debate in the House was centered on whether the bill would actually spur small-business lending or just be another version of Tarp as Republicans claimed.
