An internal review of a financing program operated by the Rhode Island Economic Development Corporation revealed procedural shortcomings "which can permit political influence to sway lending decisions."
The review by a state Department of Business Regulation bank examiner did not uncover problematic loans nor did it find instances of political meddling. However, it recommends policies be put in place to limit the possibility of political influence in loan decisions.
The look at the EDC's $11.1 million Small Business Loan Fund Corporation was part of the ongoing agency review ordered by Governor Chafee in the aftermath of the 38 Studios loan default.
Jeffrey Asermely, of the DBR, limited his review to how EDC employees go about connecting with potential borrowers, gathering and reviewing their financial records, monitoring loan performance and managing repayment issues.
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News Column
Small-business Loan Program Shows Potential for Political Meddling
Dec. 26, 2012
Paul Grimaldi
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Source: (c)2012 The Providence Journal (Providence, R.I.) Distributed by MCT Information Services
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