NFIB

Message to NFIB Members from President and CEO Todd Stottlemyer

I've had the opportunity to hear from many of you over the past two weeks, and I know you are angry, anxious and upset concerning the current crisis in the financial markets. You did not create the financial mess on Wall Street and resent being asked to clean it up.

NFIB has been in constant contact with the White House, the Treasury Department, and with members of Congress to provide them with information, data and input on the impact of this crisis on you. As a result, the legislation that was defeated Monday has undergone substantial changes that are good for small business.

Details Behind the Legislation Changes

• A provision to help local community banks clear worthless government-sponsored assets—estimated to be approximately $36 billion—from their balance sheets by treating these losses as ordinary losses instead of capital losses. Community banks are critically important to small businesses across the country. These community banks were encouraged by federal regulators to diversify their balance sheets and invest in Freddie Mac and Fannie Mae. These assets are now essentially worthless. Without this new provision, community banks would face even greater write-downs, resulting in less capital to lend to small businesses and consumers.
• Substantial provisions have been added to give the taxpayers significantly greater protection. Specifically, funds granted to the Department of the Treasury to purchase assets will be done incrementally with oversight, benchmarks and transparency.
• A provision has been added to increase the FDIC insurance limits from $100,000 to $250,000. This will give small businesses greater confidence that their business banking assets are secure.
• An Alternative Minimum Tax patch has also been added to the bill. This patch and other business tax extenders, many of which are important to small business, will provide significant tax relief.
• While not part of the legislation, yesterday the SEC and FASB clarified the mark-to-market accounting rules to help banks and others better value the assets they now hold. Under current accounting rules, banks are required to value assets based on the market value, even if that market value is significantly lower than the actual value of the asset.

We believe it is vitally important that Congress act quickly to restore stability to the financial system, and protect your ability to access credit so that you can continue to grow your business. We also recognize that you can't function successfully in isolation. Your customers, suppliers and vendors are all dependent on credit as well as functioning financial markets.

We know that you remain upset and frustrated with the current situation. It's also confusing and difficult to follow as things are changing every day. Small business must be represented. Rest assured, your voice is being heard. As this process moves forward, we will be closely monitoring the situation to make sure Main Street and taxpayers' interests are protected.

As always, thank you for your membership in NFIB.

Todd Stottlemyer