WASHINGTON - President Obama wants smaller community banks to have greater access to the government’s $700 billion financial rescue fund as the administration refocuses the bailout money on small businesses and homeowners and winds down programs aimed at big banks.
Obama today plans to announce a package of initiatives designed to increase lending, including a request that Congress increase caps for existing Small Business Administration loans, the administration said.
An administration official said the Treasury Department intends wind down and terminate bailout programs launched at the height of the financial crisis to stabilize Wall Street and aid the struggling auto industry.
The official, speaking on the condition of anonymity because the details had not yet been made public, said the $218 billion Capital Purchase Program would effectively conclude at the end of the year. The program has been a central element of the bailout program, infusing banks with government money in exchange for preferred stock.
The administration also plans to cap two programs at levels below initial projections.
One program designed to rid big banks of their bad assets will spend $30 billion instead of $75 billion, and another that supports a Federal Reserve effort to ease bank credit will top off at $30 billion instead of $80 billion.
Congressional and industry officials said there were few details about the new small bank proposal, including how much of the bailout money would be used.
But the American Bankers Association, in a letter to Treasury Secretary Timothy Geithner last month, recommended a $5 billion program for community banks that have not yet received assistance from the rescue fund.
