Congratulations taxpayers. You are about to invest in the subprime commercial loan business.
County Executive Bill McRyneolds has proposed the use $250,000 or more from our reserves to "create a revolving loan fund to be used only by small businesses in Racine County." The county "would realize a return of 1.5 to 2 percent." "The borrowers may be people with poor credit histories, bankruptcies in their past or women disadvantaged by divorce" the Journal Times reports that McReynolds has said. "Naturally they're going to have defaults, but their default rate is not much bigger than a commercial bank from what I've been told."
By now we ought to know what happens when risky loans go belly up. The borrowers claim victim status and accuses the lender of predatory practices. That makes you, the taxpayer, the predatory lender.