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IUSA TODAYI CUs MBLs helping Iowa businesses
DES MOINES, Iowa (7/12/11)--By providing member business lending, Iowa credit unions are helping commercial enterprises by filling the void in business lending that occurred when banks cut back on the loans since the start of the financial crisis, according to a Monday article in USA TODAY. In an article titled “Credit unions growing commercial lending business,” USA TODAY said total loans by banks declined by more than $500 billion from March 2009 to March 2011, according to Federal Deposit Insurance Corporation data. The publication noted that “Over the past year, credit union business lending is up 5%, while bank business lending is down 3%--a decline of about $95 billion, according to the Credit Union National Association (CUNA)." Credit unions are moving into business lending partly because of slow demand for consumer credit--such as auto and home loans--Pat Keefe, CUNA vice president of communications and media, told the newspaper. “Businesses are looking for new sources of credit; credit unions are looking for new sources of borrowers,” Keefe added. “They’re improvising strategies to do business lending.” The article also mentioned the efforts of Veridian CU, a $1.78 billion asset, Waterloo, Iowa-based credit union, to provide a $25,000 line of credit to a Des Moines, Iowa, medical-supply company so it could fill large customer orders. The company could not get a bank to extend it a line of credit, the paper said. “We’re still doing everything we’ve ever done,” John Poley, Veridian head of commercial lending, told the paper. “We just so happen to be able to now step into a void in that lending space that [banks have] created.” To read the article, use the link. CUNA and credit unions are pressing Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.
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