The banking industry's use of the Small Business Lending Fund isbeing criticized again by the Wisconsin Credit Union League forwhat the league claims is misuse.

At issue is $30 billion approved by Congress in 2010 for U.S.banks in an effort to get credit flowing to struggling smallbusinesses. To date, the fund has distributed $4 billion, accordingto the U.S. Treasury Department, which oversees the program.

The Wisconsin league has joined a growing number of critics of theloan fund saying the money is not being funneled to smallbusinesses but is actually being used by banks to repay debtacquired through the Troubled Assets Relief Program.

Signed into law by former President George W. Bush in 2008,TARP was to provide $700 billion to aid banks impacted by thesubprime mortgage crisis. So far, 829 banks have collected $540billion, according to Treasury data.

“Banks claim that paying off higher-interest obligations freesup capital for business lending, but that ignores the shell game bywhich Main Street citizens are footing the bill, and averagecitizens who own or are employed by small businesses won't be theones who benefit,” said Brett Thompson, WCUL president/CEO.

According to the league, Wisconsin banks and lending agencieshave received more than $100 million through Treasury's smallbusiness lending fund.

Thompson said credit unions are restricted by the current 12.25%member business lending cap but could help more small businesseswithout the aid of government funding if the threshold waslifted.

“[At] the same time, banks have left small businesses in thelurch – threatening the vitality of hundreds of Main Streetcommunities sustained by small businesses – by opposing federallegislation that would allow credit unions to meet smallbusinesses' credit needs at no cost to taxpayers,” Thompsonsaid.