President Barack Obama used National Small Business Week to urge Congress to act quickly on long-stalled proposals to boost lending to small businesses.

Obama hosted state winners of Small Business Administration awards for Small Business Owners of the Year. On May 25 at the White House, he told the winners that "small businesses aren't just the backbone of this economy - you are the driving force behind this recovery."

But, he added, small businesses could use more help from the federal government.

"That's why I'm calling on Congress to pass my small-business jobs package as soon as possible," the president said.

The House Financial Services Committee approved a piece of that small-business package May 19 on a party-line 42-23 vote. The Small Business Lending Fund Act would provide $30 billion in cheap capital to community banks, with incentives to use that money to make loans to small businesses.

The bill also would provide federal support to state programs that encourage private-sector lending to small businesses.

Republicans who voted against the legislation complained about its cost and contended it was nothing more than another bank bailout - "TARP Jr." in the words of Rep. Scott Garrett, R-N.J.

The program would provide taxpayer-subsidized capital to banks for loans they might make anyway, said Rep. Jeb Hensarling, R-Texas. Even worse, the incentives in the bill could induce banks to make loans to marginal borrowers, which would cost taxpayers even more if these banks fail as a result of these bad loans, he said.

House Speaker Nancy Pelosi, D-Calif., said the legislation "will be brought up for a vote soon" on the House floor.

"Republicans chose once again to side against Main Street and small businesses by opposing this job-creating bill," Pelosi said.

For more information, see www.whitehouse.gov

Banks on FDIC's ‘Problem List' at 775

The number of banks on the Federal Deposit Insurance Corp.'s "Problem List" rose to 775 in the first quarter of 2010, up from 702 the previous quarter.

Total assets at these problem banks increased from $403 billion to $431 billion. Both the number of problem banks and their assets are at their highest levels since 1993.

Most problem institutions do not fail, the FDIC noted, and the first-quarter increase in the number of such institutions was the smallest in a year.

Overall, FDIC-insured banks and savings institutions reported a total profit of $18 billion in the first quarter, up $12.5 billion from the same period a year ago. Only 19 percent of institutions lost money.

For more information, see www.fdic.gov

More new firms start than during tech boom

There is a bright side to recessions: More businesses were created last year than were created during the high-tech boom of 1999 and 2000, according to a new study by the Kauffman Foundation.

In fact, the rate of entrepreneurial activity among Americans in 2009 hit its highest point in the 14 years of data analyzed by Kauffman.

That should be good news for economic growth this year "because entrepreneurs drive the economy," said Carl Schramm, president and CEO of the foundation. The Kansas City-based organization studies and promotes entrepreneurship.

It uses data from the Census Bureau and the Bureau of Labor Statistics to calculate the percentage of adults who start a business each month. In 2009, that percentage rose to 0.34 percent, or 340 people out of every 100,000 adults.

Entrepreneurship was highest in the 35-44 and 55-60 age brackets. Men were more likely than women to start businesses. Latinos were the most likely ethnic group to be engaged in entrepreneurial activity, although their rate fell slightly in 2009. The entrepreneurial activity rate among African-Americans rose last year to 0.27 percent, the highest level in 14 years.

Geographically, the West remained the leader in entrepreneurial activity, despite a sharp decline last year. The states with the highest rates of entrepreneurial activity were Oklahoma, Montana, Arizona, Texas and Idaho. The biggest laggards in business creation were Mississippi, Nebraska, Pennsylvania, Alabama and Minnesota.

Among major metros, Houston led the nation in entrepreneurial activity.

See www.kauffman.org

Chamber joins lawsuit vs. rule on union votes

The U.S. Chamber of Commerce has joined a lawsuit challenging the National Mediation Board's decision to change its rules on union elections.

The board, in a recent 2-1 party-line vote, decided that a union can win the right to represent workers if a majority of those voting in the election vote in favor of the union. Under previous rules, a majority of all workers in the affected work unit had to vote in favor of union representation. Workers who didn't vote were counted as voting no.

The rule change makes it easier to organize workers at airlines and railroads, the industries under the board's jurisdiction. Other industries fall under the National Labor Relations Board's jurisdiction, which uses the majority-of-those-voting standard in union elections.

The Air Transport Association, which represents airlines, filed a lawsuit challenging the National Mediation Board's rule change. It contends the board "failed to identify any material change in circumstances to support the new election procedure."

For more information, see www.uschamber.com

Kent Hoover: khoover@bizjournals.com