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IBoston GlobeI features CUs push on MBL cap
BOSTON (3/2/10)--Credit unions are pushing to raise the member business lending cap for small businesses in the U.S. to help fulfill a pressing need in the economy, The Boston Globe reported Sunday. The newspaper conducted a wide-ranging question-and-answer session with Dan Egan, president of the Massachusetts, New Hampshire, and Rhode Island Credit Union Leagues, who was asked about the restrictions on the types of loans credit unions can offer members. “They can do just about any type of lending for consumers that is available anywhere else,” Egan replied to the Globe. “The big problem now is on the business side. We’re seeing a big increase in the number of people who are approaching credit unions for small business loans, and there’s an arbitrary cap on business lending for credit unions.” He was then asked if many credit unions have reached the limit. “Right now, in Massachusetts, one of the larger ones is close to the cap, and the others are staying away from the cap by cutting back on the loans they are offering,” Egan told the paper. “So, they are doing either Small Business Association guaranteed loans, which don’t count toward the cap, or they are doing only a limited number of loans. It’s presenting a barrier to credit unions. He noted that small business people “tell you if they are looking for a loan of less than $500,000, most banks don’t want to talk to them,” he added. “So you wind up with a lot of people coming to credit unions for loans. The average business loan for credit unions in this state is $254,000.” To read the article, use the link.
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