IMMEDIATE RELEASE: Tuesday January 28, 2009

MBRT Urges Swift Bipartisan Congressional Action for Economic Stimulus to Boost Lending, Stabilize Markets, and Engage America's Small & Minority Businesses

Washington, D.C. – Business owners are upset that $350 billion already given to 350 banks has not trickled down to those who are barely surviving yet create the most jobs and who before the financial meltdown, were responsible for fueling the growth the U.S. economy-America’s Small and Minority businesses. “The Troubled Assets Recovery Program (TARP) has failed to produce significant lending for our struggling minority businesses”, said Roger A. Campos, President & CEO of MBRT. “Banks, automakers and others seeking federal funds through TARP should have a duty to show how they intend to engage small and minority businesses in their business plans and agree to close government supervision before receiving any federal aid. The federal government currently has a goal of awarding 23 percent of all federal contracts to small and minority businesses. It seems only fair that the rescue plan should have similar goals.”

This week, the new Obama Administration will step up its lobbying efforts to ensure that President Obama’s American Recovery and Reinvestment Plan legislation passes Congress by mid-February. The President said, “In short, if we don’t act boldly and swiftly, a bad situation could become dramatically worse.” However, suspicion grows from Republican ranks as they claim that the $820 billion proposal is fraught with wasteful spending and they would like see more tax cuts. There are also ideas of creating a “bad bank” to buy toxic mortgage assets that are clogging the balance sheets of banks. The theory is that once free of this burden, the banks would be able to raise new capital and resume normal lending. This was the original $700 billion TARP plan before the money was diverted to urgent capital infusion. The idea has merit but a major problem is how do lenders weigh their loan portfolio risk and place a value on assets?

“Given our destabilized economy, loan portfolios are experiencing a significant weakening of underlying credit characteristics and collateral values, making an accurate prediction of net return virtually impossible and destroying confidence in portfolio performance”, said Roger A. Campos. “The fastest way to restore confidence in the performance of a lender’s loan portfolio is to target those where borrowers have been most adversely affected by current economic conditions. The technology exists today to revalidate each loan in a portfolio with updated credit bureau information and credit policies with real time valuations targeting troubled loans that should be addressed by Treasury’s TARP and TALF programs. No one knows the true value of these troubled assets and they need to be realized in the secondary market, not for pennies on the dollar. The best approach is to separate the toxic loans from those that will perform as expected and value those fairly. What better way for lenders to cure the toxic bad loan problem than by defusing its poison utilizing the latest technology.”
MBRT member, Jim DeFrancesco, Chairman of CMSI located in Columbia, MD has developed an innovative solution for lenders and the federal government to cure the toxic bad loan problem. “Without the help of the MBRT, we would not have the opportunity to have our voice heard by appropriate government agencies and Congress. Small companies often lack the resources for high paid lobbyists, but that does not mean that they do not have solutions to aid the government. We need organizations like MBRT to pave the way to open up the lines of communication”, said Jim DeFrancesco, Chairman of CMSI.
On January 13, 2009 MBRT lead a coalition of fourteen minority business trade groups urging Congress to restore the flow of capital, expand the government’ financial guarantee loan programs and include America’s Women, Veteran owned, Small and Minority Businesses as part of the economic stimulus plan.

About the Minority Business RoundTable:

The Minority Business RoundTable is the only national non-profit organization for CEOs of the nation's leading African-American, Asian-American, Hispanic-American, Native-American and other minority-owned businesses. Its members analyze and help formulate effective public policies that impact minority-owned business. Our corporate members work to create sustainable communities and national economic viability through successful partnerships.

The Minority Business RoundTable is proud to have Glaxco Smith Kline, Equifax, Southwest Airlines, IMPAC real estate holding companies, the Allegis Group and Aerotek, Inc., the Business Roundtable, an association of chief executive officers of the country’s leading corporations, Western Union, U.S. Small Business Administration, Departments of Homeland Security, Energy, Commerce, Labor and other federal agencies, corporations and business trade groups as strategic partners. For more information on the Minority Business RoundTable, please visit www.mbrt.net.

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