They have to hold a minimum total capital of 8% of risk-weighted assets - that is, capital held to back the loans that they make.
Freddie Mac (nyse: FRE - news - people ), with promises to back the loans.
Now Wednesday morning the Congressional Oversight Panel reported that the TARP bank bailout program that helped large banks so substantially may have actually harmed smaller banks, which are now struggling to try to pay back the taxpayer-provided loans.
In fact, you have to go all the way back to 2001 to find as small an outstanding small-loans-to-business balance in inflation adjusted terms.
That would have involved politicians having, for the first time, to tell their tax-payers that they would not get all their money back on their loans to Greece.
This is an extreme case, but I talked to one single mother who went back to school in her mid-30s and who has since watched her unpaid student loans swell to a hundred thousand dollars, thanks to interest and fees.
During its initial difficulties, he says, executives booked ever-riskier loans to make back losses.
Borrowers are allowed to pay their mortgage loans back early, and are more likely to do so when long-term interest rates are falling.
At the second half of 2010, the state-owned banking system cut back on loans to developers, and tightened loans to buy second homes.
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Some of those bad or near-bad bank loans would come back to life, thereby enabling banks to clean up their portfolios without destroying the economy.
For example, the path breaking work of Muhammed Yunus and the Grameen Bank shows that small micro-credit loans given to women are nearly always paid back and that the funds are used to invest in businesses, that provide funds to educate children and lift families out of poverty.
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And if you combine it with my proposal back in December to continue waiving fees and increasing guarantees for SBA-backed loans, all this will help small banks do even more of what our economy needs -- and that's ensure that small businesses are once again the engine of job growth in America.
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And what's more you commit to lend for a certain length of time - and you can only get your money back quickly if someone else is prepared to buy your loans from you.
After a lunch with his pick for the Senate seat, Kirsten Gillibrand, Paterson told reporters that the United States should help make low-cost loans available to other countries, to get the global economy back on track.
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It cut back on loans and started a program last spring that offers small-increment bonds to retail investors.
Beyond information-gathering, Lenddo also uses people's networks to essentially pressure them to pay back their loans.
Further, what if any return below 6% is made up by "interest-free loans" given by the venture to the investor, that may be paid back solely from subsequent profits that exceed the 6% mark?
Although the Soviet Union has paid back other such grain loans, its fast-deteriorating economy has led many in Congress and outside to see it as a problem credit.
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