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IBoston GlobeI notes CUs seeking higher loan limits
BOSTON (2/11/10)--Credit unions are eager to fill the lending gap for small business owners, a gap created because banks are still reeling from the credit crisis and are under pressure from regulators to be cautious, The Boston Globe said Wednesday. “Credit unions are lobbying Congress to increase their lending limits, arguing that they could help create jobs without the $30 billion President Obama has proposed giving community banks for small business loans,” the newspaper noted. Credit unions such as St. Mary’s Bank in Manchester, N.H, are looking to increase their small-business lending cap to 25% of total assets from the current 12.25% cap level for commercial loans, the paper said. “As we can lend more to the small businesses, it creates more jobs, helps the consumer, and hopefully pulls that sector back up,’’ Ronald H. Covey Jr., chief executive of St. Mary’s, the nation’s oldest credit union, told the paper. Tom Parello, president of Lynnfield, Mass.-based New England Bride Inc., a magazine publisher and bridal show organizer with 10 employees, said his line of credit was called in at a bank last spring. He had been with the bank for several years, so its request to immediately repay a five-figure loan was a surprise, the paper said. His accountant suggested he talk to Metro CU, based in Chelsea, Mass. The credit union provided him with two loans--one to pay off the bank loan and an additional line of credit. Robert M. Cashman, Metro CEO, said Parello is one of many new members the credit union has gained the past year. “We’ve received so many inquiries from small businesses around our branches, this is going to be a vast and growing area,” Cashman told the paper. “If credit unions could lend more, you could stimulate the economy and create more jobs.’’ To read the article, use the link.
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