To his credit, President Obama focused 14 different occasions on the need to assist small businesses during his recent State of the Union address. This is a far cry from the infrequent references to small businesses in the last State of the Union address by former President Bush and Obama’s first State of the Union address, where small business was referred to on only three occasions.

The most promising part of the references to small businesses is the decision of the president to overrule Secretary of the Treasury Tim Geithner and order $30 billion of unused Troubled Asset Relief Program funds to be released to community banks to lend to small businesses. When it met with Geithner in March, the Latino Business Chamber urged a similar proposal that was received but in effect rejected by the secretary.

In discussing the benefits of this release of $30 billion in TARP funds, we feel constrained to offer three cautionary observations.

• Will the funds be used for truly small businesses? That is, will the loans go primarily to the 99 percent of businesses (25 million) that have one hundred or fewer employees? Or will they largely go to medium-size corporations that in the past have often been the primary beneficiaries of Small Business Administration lending?

• Since almost 75 percent of bank assets are with banks that are “too big to fail,” we are concerned that the Goldman Sachs and J.P. Morgans of the world will remain free to lend primarily to global corporations that create jobs overseas.

• The definition of community banks should be broadly defined in metropolitan areas to be $75 billion or less in assets.

To help ensure that the $30 billion small business commitment is effective, our board of directors is determined to co-host an early meeting with the chief executives of the major community banks lending in Southern California, including City National Bank, East West Bank, Cathay Bank and Union Bank.

Los Angeles Mayor Antonio Villaraigosa recently met with several area chambers and informed us that the creation of jobs was a major priority for the city. In response to our question regarding initiating a city request for TARP funds for small business lending, he responded that this was an exciting concept and one that he would further like to discuss. We will seek to have him co-host the event, along with the leadership from the Los Angeles Area Chamber of Commerce and minority business associations, such as the Black Business Association.

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