(Selected federal and state legislation affecting business this year and next)
HR 4173 – Dodd-Frank Wall Street Reform and Consumer Protection Act. Effective July 21, 2010, this is intended to provide financial regulatory reform to protect consumers and investors, to enhance federal understanding of insurance issues, to regulate the over-the-counter derivatives markets and for other purposes.
It directs the Comptroller General to audit and report to Congress within two years after enactment of this act on all actions taken by the Board of Governors of the Federal Reserve System and the Federal Reserve banks during the current economic crisis.
It establishes the Financial Services Oversight Council, consisting of the heads of specified federal financial regulatory bodies and chaired by the Secretary of the Treasury.
The council is also required to monitor the financial services marketplace to identify potential threats to the stability of the U.S. financial system, to subject financial companies and activities to stricter prudential standards, to recommend that a member council agency adopt stricter prudential standards for the firms it regulates in order to mitigate systemic risk and to resolve, upon request, a jurisdictional dispute between member council agencies.
HR 4213 – Unemployment Compensation Extension Act of 2010. This act, which was made law July 22, amends the Supplemental Appropriations Act of 2008 with respect to the state-established individual emergency unemployment compensation account.
It extends the final date for entering a federal-state agreement under the Emergency Unemployment Compensation program through Nov. 30, 2010, and postpones the termination of the program until April 30, 2011.
It amends the Assistance for Unemployed Workers and Struggling Families Act to extend until Dec. 1, 2010, requiring that federal payments to states cover 100 percent of emergency compensation.
HR 5297 – Small Business Jobs and Credit Act of 2010. Passed Sept. 27 of this year, H.R.5297 creates in the Treasury, the Small Business Lending Fund, administered by the Secretary of the Treasury to cover purchases of preferred stock and other financial instruments from eligible institutions.
According to the House of Representatives, the purpose of this act was to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to the Secretary of the Treasury to make capital investments in eligible institutions in order to increase the availability of credit for small businesses.
It created a $30 billion small business lending fund and provides $12 billion in tax breaks to help small businesses.
The bill extends the fee reductions for SBA 7(a) and 504 loans and increases the guarantee to 90 percent through Dec. 31, or until $505 million in appropriations has been contracted.
There will be a permanent increase to the size of the loans, $5 million for both 7(a) and 504, and a temporary increase of $1 million for express loans.
The bill also includes an alternative size standard for businesses, which establishes a standard of maximum tangible net worth of $15 million and 2-year average net income after federal income tax of $5 million. This applies to both 7(a) and 504 loans.