* Report says small-business lending severely cut back
* Says more information needed on impact on small firms
WASHINGTON May 13 The U.S. government's
program to bail out the banking industry is not be doing much
to help small businesses play a part in the economic recovery,
an overseer of the government's bailout program said on
In its latest monthly report on the $700 billion Troubled
Asset Relief Program (TARP), the Congressional Oversight Panel
said small-business credit remains severely constrained and the
Treasury Department needs to gather more information on the
program's impact on small firms.
"Treasury did not collect good information when it put money
in the hands of the banks initially and it hasn't collected
good information throughout this process," said Oversight Panel
chief Elizabeth Warren. "Without good data policymakers are
Warren said lending to small businesses has been severely
cut back, much more than lending to large firms.
"Without these small businesses there will be no meaningful
economic recovery," she said.
The Congressional Oversight Panel was set up to monitor the
bailout program and provide regular reports to Congress.
The May report said it remains unclear whether the TARP
programs managed by the Treasury Department "can or will play a
major role in putting small businesses on the path to growth."
Small businesses are crucial to the overall economic
recovery as they as they account for two out of every three
jobs created in the economy, the report said.
The report said that the largest TARP program, the Capital
Purchase Program (CPP), provided hundreds of billions of
dollars of new capital to banks but that Treasury did not
require recipients to use the money to improve access to
President Barack Obama has proposed providing some $30
billion to help provide low-cost loans to small businesses, but
even if the proposal is enacted into law it may be too late to
help small businesses contribute to the economic recovery, the
The oversight panel's report said it was unclear whether
the cutback in lending reflected weak demand for credit from
small businesses or a shortfall of loans available for smaller
(Reporting by Donna Smith; Editing by Steve Orlofsky)