WASHINGTON (2/15/13)--Two key pieces of legislation that would enhance the credit union charter were introduced in the U.S. House Thursday: One bill that would address the credit union member business lending (MBL) cap, and another to improve credit unions' access to secondary capital.
"Credit union membership grew by at least 2.4 million in 2012--the greatest membership growth in 15 years," said CUNA President/CEO Bill Cheney. "These two key pieces of legislation represent tools that will give credit unions greater options for serving their growing memberships--including small business owners in search of credit to keep their businesses and their communities thriving."
Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) introduced the MBL legislation, H.R. 688, which would increase the credit union MBL cap to 27.5% of assets, from the current 12.25%-of-assets level. The bill, if enacted, would help credit unions lend an additional $14.5 billion to small businesses in just the first year after enactment. This money, which would be made available at no expense to taxpayers, would in turn help small businesses create around 158,000 new jobs.
"Small businesses are the backbone of our economy and it is critical that Congress look at proposals that help them to grow, thrive and hire," Royce said in a release. McCarthy added: "We must support America's small businesses as we continue to grow our economy. This bipartisan bill will help small businesses grow and hire new workers at zero cost to taxpayers."
The supplemental capital bill was introduced by Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.). That bill would permit the National Credit Union Administration to allow credit unions to raise capital from sources other than retained earnings without putting in jeopardy the 'one member, one vote' principle that is the bedrock of the credit union ownership structure. "As credit unions emerge from the financial crisis, this legislation would improve the safety and soundness of credit unions by allowing them to develop a supplemental cushion to reduce risk to the National Credit Union Share Insurance Fund," Cheney added.
"Our thanks to Reps. Royce and McCarthy, as well as Reps. King and Sherman for bringing these important measures forward," Cheney said. "More than 4,000 credit union representatives will be in Washington the week of Feb. 25 for the CUNA Governmental Affairs Conference, and these bills will be at the top of the lists for many as they discuss legislation for credit unions in the 113th Congress."
For CUNA letters to Congress on both bills, use the resource links.