When called a select group of small business owners together to discuss government regulations, he got an earful Monday morning in Glenview about the difficulties they have with lending institutions.
Arie Zweig of Winnetka, the owner of who hosted the event, told the story of a person who could not get a mortgage on a home despite offering to make a down payment in excess of 70 percent.
“Access to capital is important for business,” Zweig said. “I know a man who wants to buy a house for $850,000 and he was going to put $600,000 down. He makes over $100,000 a year and he could not get a $250,000 mortgage.”
Gadi Cohen of Northbrook, who owns a number of commercial properties, explained how he can own a property for 10 years, make all his payments on time and have difficulty refinancing a project because of tight lending practices.
“They make you come up with additional equity,” Cohen said describing how he has been asked to put additional capital into a shopping center when seeking a new loan even though economic performance does not warrant it. “It’s like buying the property twice.
“I have the money so it was not a problem for me. If someone doesn’t have it he’ll lose the property.”
Dold offers solutions to Cohen, Zweig
Dold, who sits in the House Financial Services Committee, has long championed exceptions to the regulations which hampered Cohen. The North Shore Congressman wants to see rules rewritten to allow banks to .
“We need regulation but it needs to be smart regulation,” Dold said. “The one size fits all approach doesn’t always work. It should be different for small banks and community banks.”
One person at the meeting who understands the need for smart regulation is Dr. Richard Harris of Bannockburn. Harris is involved with a large urological practice and business concerns related to medicine.
“There has to be a balance between safety and effective,” Harris said. “There should be some cooperation between the ISO (the international agency supervising overseas sales) and the FDA (the Food and Drug Administration).”
Dold explained to Harris the recent Free Trade Agreements just passed with South Korea, Panama and Colombia provide some relief.
David Lang of Elk Grove Village, who deals in dental related businesses, responded the FDA can be quick. “The FDA says 90 days for non invasive procedures and they come pretty close,” he said of the delay. He also mentioned the regulations were far less stringent for dental issues than medical.
Bring jobs home from China
Cohen had his own concerns with foreign business. He wants to see the federal government offer tax incentives to motivate American businesses to bring jobs back to the United States from China.
“We’re not getting the money now,” Cohen said of the tax dollars from American companies going to the Chinese government. “People are really getting tired of China.” Cohen would give a corporate income tax holiday to United States concerns bringing jobs back to the country.
While Dold is not willing to reject any proposal that might help create jobs, he would rather see a wider tax reform package that included incentives which would return investment and with it jobs to America.
“We need comprehensive tax reform,” Dold said. He wants to see repatriation, a concept that reduces the penalties for American companies bringing money held overseas home, part of the package.
“There’s $1.2 trillion overseas waiting to come back,” Dold said. “If you cap it (the cost of bringing the capital home) at 5 ½ percent they (American corporations) will want to bring it back.” He sees this as one tool to help create jobs.
Dold endorses Romney
Earlier in the day, Dold endorsed former Massachusetts Governor Mitt Romney for the Republican presidential nomination.
“Mitt Romney spent his life in the private sector and knows that you can’t be a viable enterprise if you spend more than you take in,” Dold said. “I look forward to working with Mitt Romney to pass commonsense legislation our job creators need to expand our economy.”