WASHINGTON—U.S. regulators Friday urged banks to continue lending to credit-worthy small businesses, responding to growing criticism from Capitol Hill and the White House that regulators' aggressive post-crisis supervision is cutting off credit. The Federal Reserve, Federal Deposit Insurance Corp. and other state and federal regulators in a joint statement said they were concerned about the contraction in lending to small businesses as banks respond to the financial crisis by tightening lending standards. The regulators said they are working to "ensure that supervisory policies and actions do not inadvertently curtail the availability of credit to sound small-business borrowers." Related stories The Money Hunt: SBA-Backed Loans Are Bright Spot Obama Rolls Out Small Business Lending Program Surge in Loans Is Unlikely From Small-Business Plan Lawmakers and top administration officials have expressed concern that regulators who allowed lax underwriting leading up to the financial crisis have now moved too far in the other direction.[Read more...]