Banks used billions from a small-business lending program to repay government bailout funds, rather than on its intended purpose — making more loans to mom-and-pop operations, according to a watchdog report released Tuesday.
The Small Business Lending Fund dished out more than $4 billion to 332 community banks, credit unions and community development financial institutions to lend to Main Street businesses.
It was especially appealing to small banks that received funds from the Troubled Assets Relief Program, the government's rescue initiative.