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CUNA MBL plan noted to Obama and in report
WASHINGTON (12/7/09)--The U.S. Treasury and the Small Business Administration (SBA) have incorporated the Credit Union National Association’s (CUNA) recommendation that the government lift the current credit union member business lending (MBL) cap of 12.25% of total assets into their report to the President following the recent Small Business Financing Forum. The report recommendation is included among a long list of recommendations made to Treasury by participants of a recent Obama administration meeting on small business intiatives. CUNA has long advocated lifting the member business lending cap for credit unions, a move which CUNA estimates could provide $10 billion in new small business loans once it is completed. Also, Rep. Paul Kanjorski (D-Pa.) advocated for lifting the MBL cap on Friday, discussing his pending bill, H.R. 3380, the Promoting Lending to America's Small Businesses Act of 2009, directly with President Obama aboard Air Force One. H.R. 3380 would increase the MBL cap to 25% of a credit union's total assets, would raise the "de minimis" threshold for a loan to be considered a "member business loan" to $250,000, and would exempt loans made to non-profit religious organizations as well as loans made in qualified underserved areas from the cap. Commenting on the MBL developments, CUNA President/CEO Dan Mica said that credit unions were “clearly” gaining traction “on the issue of raising the capacity of credit unions to make business loans." The joint Treasury/SBA report, which was submitted following President Obama’s recently completed White House jobs summit, also suggested expanding eligibility for the Emergency Economic Stabilization Act’s (EESA) Troubled Asset Relief Program funds to all credit unions. Some eligible credit unions currently access government-based funding through the Treasury’s Community Development Financial Institution fund. The report also provided recommendations on expanding and improving Small Business Administration programs, tax policy changes that could benefit small businesses, and supporting small business in underserved markets, expanding rural access to credit. The forum, which was held at the White House last week, included a guest list of over 100 academics, CEOs, small business leaders, and union leaders. In an interview following the summit, Google CEO Eric Schmidt told CNBC that the government could do more to "solve the loan problem" facing small- and medium-sized businesses. "They used to get loans from banks, the banks aren’t really lending to them anymore, for lots of reasons, and anything that they can do to accelerate that needs to be done right now." CUNA's Senior Vice President of Legislative Affairs John Magill and National Credit Union Administraion Chairman Debbie Matz were also present at the forum. President Obama addressed the forum, saying that his administration is “looking for fresh perspectives and new ideas” as it seeks ways to reinvigorate the job markets and economy. Vice President Joe Biden, Treasury Secretary Tim Geithner, SBA Administrator Karen Mills, Labor Secretary Hilda Solis, and Federal Deposit Insurance Corporation Chairman Sheila Bair also spoke prior to the forum. House Small Business Committee Chairman Nydia Velazquez (D-N.Y.) also remarked that credit unions and small financial institutions “are facing unprecedented challenges,” adding that the government must “look for ways to channel more resources to help smaller institutions.”
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