MADISON, Wis. (3/17/10)--Credit unions’ lending to small businesses and the bill to increase credit unions’ member business lending cap were recently in the spotlight of three publications across the nation. U.S. Rep. Paul Kanjorski (D-Pa.) has a solution to the difficult problem small businesses face procuring loans they once readily obtained to expand their businesses and create jobs, he told The Motley Fool (March 9). The solution is “lifting the cap on credit unions’ loans to small businesses, allowing them to extend more loans to help the economy grow,” he told Jennifer Schonberger in an article titled “One Congressman’s Solution for Boosting Small Businesses’ Loans.” “When I spoke with Rep. Kanjorski about his proposal, he told me that credit unions lent wisely before the crisis, and are lending more now,” Schonberger said. “Credit union business lending grew by more than 11% in 2009. Now credit unions are facing a statutory cap on lending. To fill a void in business lending, Rep. Kanjorski says credit unions need Congress’ help.” “It seems eminently clear to me that would be the right thing to do: allow these credit unions to participate in the recovery program of the American economy,” Kanjorski told the publication. Increasing the cap on credit unions’ loans to small businesses is one of the top issues facing the credit union industry, Daniel F. Egan, president of the Massachusetts, New Hampshire and Rhode Island Credit Union Leagues, told the Boston Business Journal Monday in an article titled “Credit Unions Push to Lift ‘Artificial’ Cap.” “Initiatives in the House and Senate to boost the cap to 25% of assets, however, won’t be soon enough for the Community CU of Lynn (Mass.),” reporter Tim McLaughlin wrote. “In a rare move, the Lynn credit union began pursuing a state bank charter three years ago after maxing out its business lending. The credit union has the highest ratio of business loans, 11% of total assets, among Massachusetts credit unions, according to data from the National Credit Union Administration. The article also mentions business loans at Digital FCU, Marlborough, Mass., the largest Massachusetts credit union, which would like to see more room under the business cap to meet member needs. Brett Thompson, president/CEO of the Wisconsin Credit Union League, wrote an opinion piece Friday in a Milwaukee publication, The Business Journal. “Congress must lift arbitrary restrictions--currently capped at 12.25% of assets--that prevent credit unions from making more small business loans,” Thompson said. “If the current cap were raise to just 25% of assets, credit unions could offer $355 million of new business credit and add 3,865 jobs in Wisconsin in the first year alone,” he added. The Credit Union National Association (CUNA) is a big proponent of boosting the cap, The Business Journal said. CUNA says credit unions have been making business loans to members since the early 1900s. A statutory cap on business lending activity didn’t appear until passage of the Credit Union Membership Access Act of 1998, according to CUNA’s website, the Journal said. “There was no economic rationale for this limit in 1998 and there is no rationale now,” CUNA said. To read the articles, use the links.