AP: Gov't, Lenders Blamed for Bad 9/11 Loans

[Eugene]

Gov't, Lenders Blamed for Bad 9/11 Loans

By DIRK LAMMERS and FRANK BASS
The Associated Press
Thursday, September 7, 2006; 8:19 AM

WASHINGTON -- Nearly three out of four loans made under a government program
to help small businesses get back on their feet after the Sept. 11, 2001,
attacks were made without adequate documentation, says a Senate report.

The Small Business and Entrepreneurship Committee said Wednesday that the Bush
administration's primary terrorism relief loan program was so loosely managed
that "conceivably every small business in the country became eligible to
participate."

-snip-

Sen. Olympia Snowe, R-Maine, who leads the Senate committee, said her investigation
found no evidence that small companies that received the low-cost Supplemental
Terrorist Activity Relief loans had tried to deceive the government.

Instead, she said, the problems stemmed from the Small Business Administration
and the private lenders who approved the loans. Bankers who could lend more money
at less cost under the program had an incentive to push the loans, especially
after SBA officials told lenders they wouldn't be second-guessed for making
STAR loans, she said.

-snip-

Full article: http://www.washingtonpost.com/wp-dyn/content/article/2006/09/07/AR2006090700137.html