Business in America News

Holly Petraeus Talks the Consumer Financial Protection Bureau in the Senate

This morning, Holly Petraeus -- the assistant director for the Office of Servicemember Affairs in the Consumer Financial Protection Bureau -- testified before the Senate Banking Committee.

She was there to talk about the way that predatory lenders often target servicemembers and how military families cope with economic hardships -- especially during deployments.

She told Senators: 

In my role as a military family member, I have seen the problems that can arise for our servicemembers who may experience “too much month and not enough money.” I have also seen first-hand the devastating impact financial scams and predatory lending can have on servicemembers and their families. Unfortunately there are still too many young troops learning about wise spending through hard experience and years of paying off expensive debt.

Her remarks make a powerful argument for the ways that the CFPB will help combat the lenders who try to take advantage of consumers -- and underscores why it's so important that the Senate confirm Rich Cordray.

Take a minute to check them out: http://go.usa.gov/XMf

Five Facts About a National Infrastructure Bank

Construction workers listen as President Barack Obama delivers remarks at Georgetown Waterfront Park in Washington, D.C., regarding the infrastructure piece of the American Jobs Act, Nov. 2, 2011. (Official White House Photo by Pete Souza)

Yesterday, with the Key Bridge, which connects Washington, DC with Arlington, Virginia, as a backdrop, President Obama discussed the ways that the American Jobs Act will invest in the nation's highways, airports, roads, and bridges -- and create new jobs for construction workers.

Today, the Senate is set to take up one idea that the President touted -- the creation of a national infrastructure bank.

Here's how it would work:

1) Congress would appropriate an initial $10 billion in startup money to capitalize the bank.

2) The new bank would identify transportation, energy, and water infrastructure projects that lack funding, offer a clear benefit for taxpayers, and are worth at least $100 million or $25 million for rural projects.

3) Loans made by the bank would then be matched by private sector investments or money from local governments -- so that the infrastructure bank provides half or less than half the total funding.

4) Each project would generate its own revenues to help ensure repayment of the loan.

5) Decisions would be made by a seven-person board of governors -- of whom, no more than four could be from the same political party -- and a CEO chosen by the President.

One bonus fact: The legislation that would create the bank has serious bipartisan backing -- and the support of both the U.S. Chamber of Commerce and the AFL-CIO.

We Can't Wait to Help Businesses Grow

While Republicans in Congress continue to block the American Jobs Act, President Obama is still finding new ways to boost the economy and put people back to work.

This morning, the President signed two executive memorandums: one that would shorten the time it takes for companies to commercialize federal research, and another to launch BusinessUSA -- a website that will make it easier for companies to learn about federal resources for business and exports -- in early 2012.

"With too many families struggling and too many businesses fighting to keep their doors open, we can't wait for Congress to take action," President Obama said in a statement.

The first order will help speed up the time it takes for government research facilities to issue grants to start ups and give federal agencies more flexibility to partner with businesses.

Every year, the government spends approximately $147 billion on research and development. This order from the President will help to ensure that money gets used even more efficiently.

And by the way, we know the federal research grant process helps to spark entrepreneurship. Qualcomm, the communications giant; Symantech, the software security firm; and iRobot, maker of the Roomba and Packbot, all received federal agency support before becoming an industry leader.

BusinessUSA will help companies of all sizes access the full range of government programs and services they need to compete, grow, and hire.

Right now, a range of government websites offer resources and programs to support businesses, but navigating those sites and finding the information you need isn't easy.

BusinessUSA will change that and offer a centralized location where an entrepreneur can come to access programs to grow their exports, for instance.

Agencies across the federal government will also find ways to integrate BusinessUSA deeply into their websites, call centers, and field offices -- so that this new service becomes the primary way that companies get the information and support they need to grow and hire.

The President is moving forward with BusinessUSA after calls for this type of reform from the President’s Jobs Council, the President’s Export Council, and businesses across the country.

It will launch early next year.

President Obama also can't wait for Congress to:

• Reduce prescription drug shortages
• Help America's graduates
• Lower monthly student loan payments
• Put veterans back to work
• Help homeowners refinance their mortgages

Advance Estimate of GDP for the Third Quarter of 2011

Today’s report shows that the economy posted the ninth straight quarter of positive growth, as real GDP (the total amount of goods and services produced in the country) grew at a 2.5 percent annual rate in the third quarter of this year. The level of real GDP now exceeds its level at the business cycle peak in the fourth quarter of 2007. While the continued expansion is encouraging, faster growth clearly is needed to replace the jobs lost in the recent downturn and to reduce long-term unemployment.

Notable strength in the third quarter included business investment, which grew 16.3 percent at an annual rate. Residential construction increased 2.4 percent at an annual rate, and was up 1.6 percent during the past four quarters, the first positive four-quarter percent change since 2006 except for a brief period when the home buyer tax credit was active. Positive contributions to real GDP growth included consumer spending (1.7 percentage point), fixed investment (1.6 percentage point), and net exports (0.2 percentage point).  Inventory investment subtracted 1.1 percentage point from real GDP growth.

We are, nonetheless, at a fragile moment in the world economy, and cannot afford to do anything to undermine our economic recovery. That’s why the President continues to urge Congress to pass the American Jobs Act without delay. The American Jobs Act includes measures that would accelerate the recovery, including extending the payroll tax cut and unemployment insurance, keeping teachers in the classroom and police and firefighters on the beat, and investing in our nation’s infrastructure to help put Americans back to work.  Independent economists say it could increase employment by up to 1.9 million, increase growth and lower the unemployment rate. This report also underscores the need to put in place a balanced approach to deficit reduction that phases in budget cuts, instills confidence, and allows us to live within our means without shortchanging future growth.

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We Can’t Wait: Supporting Our Veterans

I think all Americans can agree that veterans shouldn’t have to fight for a job once they’ve come home from the fight overseas. But, all too often, those who have sacrificed so much for America struggle to find a job worthy of their talents. As the President has said, “if you can save a life in Afghanistan, you can save a life in an ambulance. If you can oversee millions of dollars of assets in Iraq, you can help a business balance its books here at home.” Ensuring our nation’s veterans get the opportunities they have earned has been one of President Obama’s top priorities as Commander in Chief. 

That's why President Obama called for a new Returning Heroes Tax Credit of up to $5,600 for firms that hire unemployed veterans and a Wounded Warriors Tax Credit that will increase the existing tax credit up to $9,600 for firms that hire veterans with service-connected disabilities.These credits are included in the American Jobs Act. Unfortunately, these tax credits that could help companies hire veterans are held up in Congress.  

While we will continue to work with Congress to bring up the American Jobs Act piece by piece, we will increase our focus on taking executive actions that fight for the middle class because the American people simply can’t wait. That’s why today, the Obama Administration is announcing two new initiatives to help create jobs for veterans. 

1. Hiring 8,000 Veterans in Three Years: The Community Health Center Veterans Hiring Challenge 

Today, the Obama Administration challenged Community Health Centers to hire 8,000 veterans – approximately one veteran per health center site – over the next three years. The National Association of Community Health Centers will also contribute to this effort and joined the Administration in announcing this Community Health Center Veterans Hiring Challenge. 

2. Helping Veterans Become Physician Assistants 

Under this initiative, the Administration will make it easier for veterans to use the training they have received in the military to become physician assistants. We will begin to give priority in physician assistant grant awards to universities and colleges that help train veterans for careers as physician assistants. In an effort to expand the number of training programs that accommodate veterans, the Administration also will identify model programs that offer expedited curricula for veterans and that offer enhanced veteran recruiting, retention, and mentoring services, and help bring these best practices to other programs. 

These efforts build on previous Administration efforts to create jobs for veterans including sending 600,000 veterans back to school on the Post-9/11 GI Bill and hiring over 100,000 veterans into the federal government over the past year and a half. And just last week, First Lady Michelle Obama announced that the American Logistics Association (ALA) and their 270 affiliate companies committed to hiring 25,000 veterans and military spouses by the end of 2013. This commitment is part of the First Lady and Dr. Jill Biden’s Joining Forces initiative to support veterans and military families. The ALA’s commitment will fulfill a quarter of the President’s challenge to the private sector to hire or train 100,000 veterans and military spouses by the end of 2013. 

This work is also happening across the federal agencies.The Departments of Defense and Veterans Affairs, are working closely with other agencies and the President’s economic and domestic policy teams, to lead a new task force to ensure that every member of the military receives the training, education, and credentials they need to transition to the civilian workforce or to pursue higher education. This initiative includes the design of a “Transition Boot Camp,” which will give service members additional counseling and guidance and help them depart their active duty service “career-ready.” 

Over the weeks and months ahead, we’ll continue to take actions like these that will improve the economy and help middle class families including our nation's veterans because we simply can't wait.

President Obama also can't wait for Congress to:

• Reduce prescription drug shortages
• Help businesses grow
• Lower monthly student loan payments
• Help America's graduates
• Help homeowners refinance their mortgages

The American Jobs Act Bus Tour: President Obama at Fire Station 9

In Chesterfield, Virginia, President Obama stopped by Fire Station 9 to talk about the challenge facing police and fire fighters across the country.

In too many communities, local governments have made the choice to respond to tough economic times by cutting police forces and scaling back fire stations. Speaking to a crowd that included around 100 first responders, the President called the situation "dangerous":

Now, Chesterfield has been lucky. It isn't facing layoffs right now. But a lot of these guys have seen their pay frozen. You've got cities and states like Michigan and New Jersey that have had to lay off big chunks of their forces. That means that firefighters can't always get to fires before they become major fires. And that makes their job more dangerous. It means police officers can't respond to every crime. And when giving our children the best education possible we know is the ingredient for success in this new information and technology-rich economy, how can we be laying off teachers -- when other countries are hiring teachers in droves? It's unfair to our kids. It undermines our future.

The first piece of the American Jobs Act -- a $35 billion proposal to help keep teachers and first responders on the job-- is designed to tackle that problem and ensure that public safety isn't put at risk.

It is currently in the Senate.

And in Chesterfield, President Obama pressed Congress to take action right away:

[If] they vote against these proposals, if they say no to steps we know that will put people back to work right now, they're not going to have to answer to me -- they're going to have to answer to you. They're going to have to come down here and tell folks in Virginia and all across the country why people are going to have to cope with fewer first responders; why your kids can’t have teachers back in the classroom. They’re going to have to look construction workers in the eye and tell them why they’re sitting idle instead of rebuilding infrastructure that we know needs to be rebuilt.

President Barack Obama delivers remarks on the American Jobs Act at Fire Station No. 9 in North Chesterfield, Virginia during the American Jobs Act bus tour, Oct. 19, 2011. (Official White House Photo by Pete Souza)

Today, Senator Harry Reid, the Majority Leader, announced that the legislation could see a vote as soon as Friday.

First Responders Say the American Jobs Act Will "Allow Us to Respond Safely and More Effectively"

Vice President Biden was in Flint, Michigan to talk with fire fighters and police officers about the American Jobs Act.

Right now, local communities across the country are laying off first responders as policymakers struggle with budget cuts in the tough economy. It’s putting public safety at risk. 

In Michigan, the Vice President said, "The President and I believe that the single-most basic obligation a government has -- it exceeds -- the single-most basic obligation is to keep its citizens safe.  It’s literally -- everything flows from that.  All our civil rights flow from being able to be safe in our streets, in our homes, our schools, our businesses.  Everything flows from it.”

That's why the American Jobs Act calls for $5 billion for local governments to keep police and fire fighters on the job. 

Watch the Vice President and listen to these first responders tell their stories about why these funds are so necessary.

This Week on Treasury Notes: Dismantling the Myths Around Wall Street Reform

Ed. Note: Cross-posted from Treasury Notes.

In the fall of 2008, a financial crisis of a scale and severity not seen in generations left millions of Americans unemployed and resulted in trillions in lost wealth. Our broken financial regulatory system was a principal cause of that crisis. It was fragmented, antiquated, and allowed large parts of the financial system to operate with little or no oversight.

Today, our most important challenge is creating stronger economic growth and helping the millions of Americans who lost their jobs get back to work. As part of that effort, we are committed to implementing new rules that will build a safer, more stable financial system—one that provides a robust foundation for lasting economic growth and job creation.

In order to achieve these goals, and help protect our economy from future crises, we must continue with the implementation of Wall Street Reform. However, more than a year after the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, opposition to reform persists.   

Opponents are voicing a wide range of criticisms in a concerted effort to slow down, weaken, or roll back reform. Their arguments are misguided. This week, we’ll be taking a look on this blog at what those critics are saying—and rebutting their claims one by one. We begin this series by addressing one of the key misconceptions surrounding reform—its impact on small banks.

Myth #1: Wall Street Reform Hurts Small Banks

Fact:

This claim is particularly dubious given strong support for enactment of the Dodd-Frank Act by the Independent Community Bankers of America.  Wall Street Reform helps level the playing field between large banks and small ones, helping to eliminate distortions that previously favored the biggest banks that held the most risk. The Dodd-Frank Act subjects big banks to much higher standards than small banks in a number of areas:

• Tough new capital and liquidity requirements to reduce the risks presented by the biggest Wall Street firms do not apply to community banks. In fact, the law largely exempted about 7,000 community banks and thrift institutions, nearly all of which hold less than $10 billion in assets and a third of which hold less than $100 million, from these requirements.  
• Wall Street Reform requires the biggest institutions to pay a larger share of the cost of deposit insurance protection, reflecting the greater risk they pose to the financial system.
• Wall Street Reform strengthens protections for one of community banks’ core sources of funding by raising deposit insurance protection from $100,000 to $250,000.

The Dodd-Frank Act also helps to level the playing field between small banks and their nonbank competitors by making sure they’re playing by the same set of rules. The Dodd-Frank Act gave the Consumer Financial Protection Bureau the ability to examine regularly nonbank financial services providers—like payday lenders, debt collectors, and independent mortgage brokers—and to prohibit unfair, deceptive, and abusive acts or practices that hurt small banks and Americans across the country. Of course, in order for the CFPB to be fully equipped to carry out these crucial responsibilities, the Senate must move forward expeditiously to confirm Rich Cordray as Director.

Finally, Wall Street Reform helps make sure that small banks are not subject to excessive supervisory burdens, such as multiple exams by different regulators. The regulatorsof community banks will bear responsibility for enforcing one set of rules issued by the new CFPB, allowing small banks to avoid the burden of multiple exams.

The authors of Wall Street Reform understood that small banks did not cause the crisis and should not be the focus of reform. Small banks play a critical role in their communities—creating jobs and helping Americans borrow money to buy a home, grow their businesses, or pay for college.

Thanks to the steps now being taken, reform is helping put community banks on a more equal footing and is strengthening—not weakening—their essential role in our financial system. That’s good news for growth and job creation in communities across the country.

The American Jobs Act Bus Tour

President Obama begins the American Jobs Act Bus Tour this morning.

For three days, he'll tour cities in both North Carolina and Virginia -- visiting schools, an airport, a military base, and a fire station. He'll be talking about his plan to put Americans back to work, upgrade our country's infrastructure, and keep teachers and emergency responders on the job.

Last week, Senate Republicans voted to block the President's proposal, playing politics instead of working to grow our economy.

But this fight to create jobs and rebuild our nation's roads and bridges is far from over. On Wednesday, President Obama said:

We will keep organizing and we will keep pressuring and we will keep voting until this Congress finally meets its responsibilities and actually does something to put people back to work and improve the economy.

This bus tour puts a face on the teachers, firefighters, and police officers whose livelihoods are threatened by inaction.

The trip began this morning in Asheville, North Carolina and wraps up Wednesday in North Chesterfield, Virginia.

The first event was this morning at Asheville Regional Airport, where the President spoke about the need to upgrade the nation's infrastructure.

At 5:00 ET this afternoon, the President will speak from West Wilkes High School in Miller's Creek, North Carolina. You can watch those remarks live at whitehouse.gov/live.

You'll also be able to watch the President speak tomorrow from Guilford Technical Community College in Jamestown, North Carolina using the same link. On Wednesday, we'll also stream video of President Obama as he speaks at Joint Base Langley-Eustis in Hampton, Virginia and a firehouse in North Chesterfield, Virginia.