SBIA Update: February 28, 2020
SBIA Update is a way to stay up-to-date on the latest industry news, SBIA member information, and policies that impact the lower middle market. Below are a few articles featured in this edition of SBIA Update. For the full news update, please refer to the SBIA Update email in your inbox.
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Legislative & Regulatory Update
SBA Administrator Testifies Before House Committee
On Wednesday, February 26, Small Business Administrator Jovita Carranza appeared before the U.S. House Committee on Small Business Committee for the first time since she was sworn in last month.
While this hearing, titled “A Discussion with SBA Administrator Jovita Carranza: Current Issues and the FY2021 Budget,” was a full agency overview and not SBIC specific, Administrator Carranza stated early on that SBICs are an area of focus and that her agency needs to do better for those looking to invest in small businesses through the program. The Administrator noted that, as part of her ongoing review, she will be bringing in a Treasury Department official to help her “objectively assess the program and identify areas for improvement.” She also mentioned that having the Office of Investment and Innovation fully staffed is a priority, as is doing more outreach to better identify future program participants. SBIA has received similar commitments from the Administrator on these and other issues, and we look forward to working with her and her team to strengthen the program.
Coronavirus: Market Impact Analysis
While the full impact of the coronavirus on the U.S. economy is unclear, new research from Dun & Bradstreet shows COVID-19 could impact 5 million companies around the globe. The report found that roughly 1/5th of those are U.S.-based companies with subsidiaries in the affected Chinese provinces and that the five major industries impacted include services, wholesale trade, manufacturing, retail, and financial services. An estimated 51,000 companies worldwide could face supply chain issues due to suppliers in the affected region slowing production times. Late Tuesday afternoon, President Trump and National Economic Council Director Larry Kudlow attempted to calm the markets over the coronavirus outbreak. Some speculate that a “black swan” effect could slam the economy and hurt the President in an election year.
Missy Jenkins is a Healthcare Policy Analyst and Founder at BelleAire Consulting in Washington, DC
FDIC, OCC extend comment period on CRA reform
In his appearance before the House Financial Services Committee earlier this month, Comptroller of the Currency Joseph Otting repeatedly refused requests from Democratic members for the OCC and Federal Deposit Insurance Corporation (FDIC) to extend the comment period on proposed changes to rules implementing the Community Reinvestment Act. On February 19, the FDIC and OCC announced that they will extend the deadline for comments — not to the 120-day period requested by House Democrats, but by 30 days, to April 8. The announcement gave no explanation, except to say, “The FDIC and OCC have now determined that a 30-day extension of the comment period is appropriate.” Federal Reserve Board Chairman Jerome Powell has said that the Fed will not decide whether to propose its own rule changes until it reviews the comments submitted to the OCC and FDIC.
Main Street investment named Wisconsin Manufacturer of the Year
Main Street investment Gamber-Johnson, LLC, has received the prestigious Wisconsin Manufacturer of the Year Award for the medium category. In 2016, Main Street facilitated the leveraged buyout of Gamber-Johnson, a market leading provider of ruggedized mounting systems for law enforcement, public safety, telecommunications, utility and military end markets.
Monroe Capital partners with Cimarron Healthcare Capital to acquire Ascent Behavioral Health
Monroe Capital announced the acquisition and recapitalization of Ascent Behavioral Health (“Ascent”), in partnership with Cimarron Healthcare Capital and Ascent’s management team.
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