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The House on Tuesday gave final approval to a bill that will allow some small banks to raise additional capital without registering with the Securities and Exchange Commission.
March 27 -
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.
March 15
WASHINGTON — President Obama signed legislation Thursday that will remove impediments faced by some small banks and other businesses as they seek to raise new capital.
The law passed Congress with strong bipartisan support, overcoming a late backlash from consumer groups and some congressional Democrats who say that it will weaken investor protections and open the door to more financial fraud.
During a Rose Garden signing ceremony, Obama did not address that criticism, though he did warn congressional Republicans who were in attendance that the Securities and Exchange Commission needs to get proper funding from Congress.
Obama's remarks focused largely on America's legacy of entrepreneurialism — he invoked the names of Thomas Edison, Alexander Graham Bell, Bill Gates, Steve Jobs and Mark Zuckerberg — while touting the law's crowd-funding provisions, which will allow start-up companies to raise money online from small investors.
"For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in," Obama said.
The part of the new law that most directly affects small banks is an increase in the threshold that requires banks to register with the SEC from 500 shareholders to 2,000.
That provision figures to save some small banks money. According to the Independent Community Bankers of America, SEC registration costs small banks approximately $100,000 in the first year and about $50,000 in each successive year.
The law also boosts the threshold that triggers bank de-registration from 300 shareholders to 1,200.
The measure will also have important implications for large investment banks. According to reports this week by
Those changes law will affect investment banks' relationships with companies that have less than $1 billion in annual revenue.
The law gives Obama a bipartisan achievement to tout in an election year. It doesn't hurt that the measure is called the JOBS Act — short for the Jumpstart Our Business Startups Act — even though critics question how many jobs it will actually create.
In attendance at Thursday's ceremony was a mix of Democratic and Republican members of Congress, who also basked in the glow of a bipartisan job-creation measure.
Among the Republicans at the White House were Housing Financial Services Committee Chairman Spencer Bachus, House Capital Markets Subcommittee Chairman Scott Garrett, and House Majority Leader Eric Cantor.
Following the ceremony, Cantor took questions from reporters. He brushed off criticism that the new law will open the door to fraud, saying that it strikes the proper balance between investor protection and expanding access to capital.
"I hear anecdotally throughout my district in Richmond, Virginia, and throughout the country, it is too hard for small businesses to get off the ground and grow," Cantor told reporters.
