Amesbury bank gets $17m from US to boost lending
The federal government said yesterday it gave an Amesbury bank $17 million as part of program designed to boost small business lending by injecting money in community banks.
So far, the Department of the Treasury has awarded $2.4 billion to nearly 200 banks, including $58 million to seven institutions in Massachusetts.
The latest local bank to receive aid is Provident Bancorp Inc. of Amesbury. Two other Bay State community banks previously received $10 million or more:
The White House has argued the program is an effective way to boost small business lending since banks will pay lower interest rates for the money if they increase lending.
But critics, including several Republicans in Congress, have blasted the Small Business Lending Fund as another bank bailout, similar to the controversial Troubled Asset Relief Program approved by Congress during the financial crisis. More than half the banks that received TARP money, including Central Bancorp, have applied for the program in part to repay the money they received under TARP.
Bank executives and analysts said the small business lending program offers more favorable interest rates and fewer strings than TARP did.
Treasury officials, however, said they have barred banks from participating if they are in shaky financial condition or have repeatedly missed dividend payments of the government under the TARP.