CFO Sink Takes Lead on Encouraging Small Business Lending, Commends Fdic Changes
CONTACT: Kyra Jennings or Kevin Cate, (850) 413-2842
TALLAHASSEE— Florida CFO Alex Sink today announced specific steps she has taken to encourage more small business lending in Florida and help create jobs in the state. CFO Sink outlined her plans to support small business lending on a conference call less than two weeks ago.
“With small businesses representing over 90 percent of all businesses in Florida, it is critical to our state’s economic recovery that we do everything we can to support Florida’s small business owners,” said CFO Sink. “I have expressed to Florida’s financial institutions, from our community banks to our top lenders, that I expect them to use everything at their disposal to offer small businesses what they need -- better access to capital.”
CFO Sink took the following steps to promote participation and accountability in the recently announced Small Business Lending Initiative:
• Encouraging 167 community banks in Florida to participate in the federal Small Business Lending Initiative and noting how important it is for community banks to provide the capital needed for Florida’s small business community (letter attached).
• Requesting that Office of Financial Regulation Commissioner Tom Cardwell monitor small business lending activity and provide a report to the Financial Services Commission (letter attached).
• Reaching out to executives at Florida’s five largest banks (Bank of America, Wachovia/Wells Fargo, SunTrust, Regions, and BB&T) to inquire about their current levels of lending in Florida and encourage them to set aside more funding for small business lending.
During CFO Sink’s discussions with representatives from the major financial institutions in the state, she heard multiple times that there was not enough flexibility with regard to loans backed by commercial real estate as collateral. Given this observation, CFO Sink commended the Federal Deposit Insurance Corporation (FDIC) for adopting guidelines on prudent commercial real estate loan workouts late last week.
“The FDIC’s new guidelines will not only help Florida’s businesses get the modifications they need to stay in their establishments, but will increase the amount of capital available to loan to new small businesses,” CFO Sink said. “I heard overwhelmingly from Florida’s lenders that they needed more flexibility in this area and I am pleased the FDIC was able to strike a balance of prudent credit practices and meeting legitimate credit needs.”
Under the FDIC guidelines released Friday, loans to creditworthy borrowers that have been restructured and are current will not be classified as high risk by regulators solely because the collateral backing them has declined to an amount less than the loan balance.
For more information on the Federal Small Business Lending Initiative, visit: http://www.whitehouse.gov/assets/documents/small_business_final.pdf. For more information about the new FDIC guidelines for commercial real estate loan workouts, visit: http://www.fdic.gov/news/news/financial/2009/fil09061.html.
As a statewide elected officer of the Florida Cabinet, CFO Alex Sink oversees the Department of Financial Services. A successful businesswoman with nearly three decades of experience in the private sector, Sink is serving her first term as Florida's CFO. As CFO, Sink's priorities include using her business experience to cut wasteful government spending, cracking down on financial and insurance fraud and reforming the state government's contracting practices.