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News Now

Washington
CUNA chair at White House small biz act ceremony
WASHINGTON (9/28/10)—President Barack Obama on Monday officially signed H.R. 5297, the Small Business Jobs and Credit Act, which authorizes a $30 billion fund to bolster bank lending to small business. Credit Union National Association (CUNA) Chairman Harriet May was among those attending the signing ceremony. May on Monday thanked President Obama on behalf of credit unions for expanding Small Business Administration (SBA) loan limits, a move that will allow credit unions to increase their work with small business-owning members. Erie FCU's Sandi Carangi also attended the signing ceremony on behalf of her credit union. Specifically, the legislation increases SBA 7(a) loan limits to $5 million from $2 million, 504 loan limits to $5.5 million from $1.5 million, and 7(a) "Express Loans" to $1 million from $300,000. The bill also ups the definition of microloans from $35,000 to $50,000. The bill will also allow, as of 2011, retirement savings plans sponsored by state and local governments to include Roth accounts. Roth accounts are currently only available in 401(k) and 403(b) plans. Participants in those 401(k) and 403(b) plans, as well as governmental 457(b) plans, will be permitted to roll their pre-tax account balances into a Roth account. The legislation also extends portions of the Stimulus Act that eliminate borrower fees on SBA 7(a) and 504 loans and extend the current 90% government guarantee on 7(a) loans through the end of this year. Credit unions sometimes cite high fees as a reason they are unable to particpate in SBA lending programs. The holding period of assets subject to a built-in gains tax has also been shortened to five years if the fifth taxable year in the holding period precedes the taxable year beginning in 2011. The bill also provides $1.5 billion in grants to existing state small business programs that help private lenders extend more credit to small businesses.


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