WASHINGTON (3/1/12)--Senate Banking Committee Chairman Tim Johnson (D-S.D.) has announced that his panel will conduct a hearing next week to study a community bank bill that would, in part, increase a 500-shareholder threshold that requires a small bank to register with the Securities and Exchange Commission (SEC).
There have been widespread reports this week that Senate Majority Leader Harry Reid (D-Nev.) has signaled he will soon make time for a vote in that chamber for a larger legislative package, designed to spur small business growth, that could include the community bank measure.
John Magill, executive vice president of government affairs for the Credit Union National Association (CUNA), in response to reports reiterated CUNA's position that credit unions would support a package as long as it combined a credit union legislative priority with that of the banking industry.
CUNA backs an increase in credit union member business lending (MBL) as a means to help small businesses and create new jobs. Increasing the current 12.25%-of-assets cap to 27.5% would inject $13 billion in new credit and create 140,000 new jobs within the first year of enactment, according to CUNA estimates.
"If combining credit union and bank interests in a single bill is what it takes to help the economy by helping small businesses with increased MBL authority," Magill said," then we favor it. That would be fine by us."
According to the Feb. 29 issue of American Banker, there is an effort afoot in the Senate to create such a dual package. The Banker reported that Sen. Mark Udall (D-Colo.), sponsor of MBL legislation in the Senate, has placed a hold on the community bank bill, thereby impeding its progress.
The newspaper reported that its sources said Udall is conditioning support of the package on the inclusion of an increase in MBL authority for credit unions.
The community bank, SEC-registration bill is strongly backed by the Independent Community Bankers of America (ICBA). That group has estimated that SEC registration can cost small banks around $100,000 in the first year and $50,000 in subsequent years.
However, the ICBA said Tuesday that it will withdraw support for the entire pro-small business package if the credit union MBL provision is included, according to the article.
Both the U.S. House and Senate have conducted hearings on CUNA-backed MBL Legislation. The House bill, the Small Business Lending Enhancement Act (H.R. 1418), was introduced by Rep. Ed Royce (R-Calif.) and has 120 additional co-sponsors. Udall's bill of the same name (S. 509) has 22 co-sponsors.
For more information on the Senate Banking Committee hearing and the MBL bills, use the resource links below.