ST. PAUL, Minn. (3/29/10)--An article by Minnesota Credit Union Network President/CEO Mark Cummins notes small businesses are clamoring for loans, and credit unions can help to spur lending to them if member business lending limits are lifted.
About 99% of the nation's 25.8 million registered businesses are considered small, he said in an opinion-editorial in Finance & Commerce
(March 26). Only 40% of small business owners attempting to borrow in 2009 had all their needs met--lower than in the mid-2000s when up to 90% had so. "All of this leads one to draw the conclusion that low credit availability is exacerbating the effects of the recession," Cummins wrote, adding, "Credit unions can help." Cummins noted that credit unions are being innundated with requests from small businesses. "Despite the economic slowdown, credit union member business lending in Minnesota increased by 0.4% over the past year. While that might not seem like a large increase, any gain is impressive in today's economy. And we're originating more loans than ever before, with credit union business lending up 47% over the past four years." Credit unions are working hard to meet the demand, but "restrictive regulations limit our ability to do so," he wrote, noting credit unions' arbitrary business lending cap. Relaxing the artificial lending restriction would promote lending, spending and jobs creation, therefore increasing the flow of credit to borrowers and neighborhoods. He urged passage of such legislation currently before Congress. Cummins used remarks from House Financial Services Chairman Barney Frank (D-Mass.) and House Small Business Committee Chairwoman Nydia M. Velázquez (D-N.Y.) to illustrate his point. Both have recently commented on the importance of small businesses and ready access to capital. He also referenced the Obama administration’s recent emphasis on these issues in its economic agenda. “It seems that credit unions, consumers, Congress and the commander-in-chief all want the same thing,” Cummins concluded. “It is our responsibility to overcome the risks [of extending credit in a struggling economy] and expand lending-- and the credit unions of our state are willing to gamble on Minnesota.” Use the link for the full column.