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Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release September 23, 2004 #04-47
E-mail: [email protected]

ACB URGES CONGRESS TO ENCOURAGE SMALL BUSINESS GROWTH AND ACCESS TO CAPITAL

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WASHINGTON, D.C. — In testimony before the Subcommittee on Oversight and Investigations of the Financial Services Committee, ACB representative Tom Schneider stated that, “Small businesses are growing and creating much-needed jobs, often because community banks across our nation focus on helping local businesses with their capital needs.”

Schneider, who is president and CEO of Pathfinder Bank, a $300 million community bank in Oswego, N.Y., said that, “Small businesses are the economic engine in our country. They are our job creators, and they are vital customers for my bank.”

Schneider noted that, “One of the greatest tools we have” for aiding small businesses “is also one of the U.S. Government’s best private/public partnerships ever created by Congress — the programs of the Small Business Administration.” Schneider specifically noted the benefits of two primary SBA programs used by community banks: the 7(a) and 504 loan programs. Schneider lauded these guarantee programs that “allow community banks the opportunity to provide capital to small businesses that would not otherwise qualify for credit.”

He added that empowering community banks through these programs was particularly effective because, “Community banks offer access to the decision-maker, and that decision-maker knows the people and the area. Because we know and understand the unique needs of small businesses, community banks are often more flexible in their decision making.”

Schneider did offer two cautionary observations to the subcommittee. One was the potential increased regulatory cost to implement Sarbanes-Oxley. While supporting the goals of the legislation, Schneider pointed out that the increased regulatory and compliance costs, especially on smaller banks, could mean less funding for loans. Schneider suggested that some of the law’s “provisions are unnecessary for the banking industry because we are already tightly regulated and tightly supervised by federal regulators.” He added that, “The costs and fees associated with complying with Sarbanes-Oxley may justify allowing smaller organizations to be exempt from portions of the law.”

Schneider also said that ACB and its members support efforts to see if there are requirements that can be streamlined or waived by the Securities and Exchange Commission to facilitate greater access to the capital markets for small businesses. He stated that, “While many of the existing regulations may be necessary for larger and more complex companies, they may be an unnecessary obstacle to small businesses in seeking access to capital markets.”

Schneider explained to the subcommittee that community banks were also small businesses and that they, too, were seeking ways to increase their visibility and their capital, noting that ACB had created the America’s Community Bankers NASDAQ Index of over 500 community banks. The Index focuses attention on community banks as a vital sector of the financial services industry and our nation’s economy.

Schneider concluded by stating that he believed, “there is a prosperous climate for Americans to start and grow a small business,” and that community banks want to help fuel that growth.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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