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BANKERS GROUP SUPPORTS D'AMATO'S LOAN PLAN

Sen. Alfonse M. D'Amato's plan for boosting small-business lending got a big boost itself Tuesday: an endorsement from the American Bankers Association.

"After careful review, we believe that your proposed legislation, if enacted, could prove valuable in enhancing the availability of credit to small businesses," ABA President William H. Brandon Jr. wrote in a letter to D'Amato.

D'Amato's plan would ease federal regulations that stand in the way of a large-scale "secondary market" for small-business loans, which would allow banks to sell the loans they make to investors to free up more money for additional lending.

The D'Amato plan's main competitor is a bill authored by Rep. John J. LaFalce, D-Town of Tonawanda, that would set up a "government-sponsored enterprise" to organize such a secondary market.

The LaFalce plan would involve a federal investment to set up a secondary market for small business loans, and would leave the government potentially liable for loan losses. D'Amato's plan would leave such matters to the private sector -- which is why the bankers' group supports it, Brandon said in his letter.

D'Amato, R-N.Y., said the endorsement "will help speed passage of legislation to ease the credit crunch."

Congressional action on the competing business loan plans is expected later this year.

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