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White House Includes CDFI CUs in Latest Round of Small Biz Loan Relief

During a recent records-storage facility visit to Maryland, President Barack Obama unveiled a new round of lending initiatives targeted at helping small businesses.

By Michelle A. Samaad | Updated on November 03, 2009

During a recent records-storage facility visit to Maryland, President Barack Obama unveiled a new round of lending initiatives targeted at helping small businesses.

Among the strategies to improve access to credit for small businesses, the Obama administration said it will support lending by providing lower-cost capital to small banks that present small business lending plans and to community development financial institutions that lend to small businesses in the hardest hit rural and urban areas. CDFI credit unions would be eligible to apply. Under the Capital Purchase Program, which allowed banks to apply for capital at a dividend rate of 5% for the first five years and stepping up to 9% after five years, credit unions were not eligible. The proposal would now allow them to apply for subordinated debt at rates equivalent to those offered to CDFI banks and thrifts.

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