WASHINGTON (12/15/11)—The Credit Union National Association (CUNA) has continued to aggressively advocate for increased credit union member business lending (MBL) authority as 2011 nears its end, with CUNA President/CEO Bill Cheney saying Congress should consider using all "available and sensible remedies," including an MBL cap increase, to increase accessibility of funding to small businesses.
Cheney promoted an MBL cap lift in a letter that was sent to Senate securities subcommittee chairman Jack Reed (D-R.I.) and ranking member Michael Crapo (R-Idaho) ahead of a Wednesday hearing on investor risk in capital raising. Cheney said "credit unions support efforts to help small businesses, and want to be part of the solution as well."
Cheney added that raising the MBL cap, if compared with other remedies to address small business credit shortage, would "come considerably ahead" of other suggested solutions, including more lenient registration rules for banks with the Securities and Exchange Commission and rules regarding "crowdfunding," a method of raising funds through pools of investors.
"Credit unions would be significantly troubled if any of the bills related to shareholder thresholds or crowdfunding moved through the legislative process in the absence of similar movement of S. 509," pending legislation raise the cap on credit union business lending to 27.5 percent (from the current cap of 12.5 percent), Cheney wrote. He added: "This is a key issue for credit unions."
CUNA has estimated that increasing the current 12.25% of assets MBL cap to 27.5% of a credit union's total assets would have a number of beneficial effects on the ailing economy, including infusing $13 billion in new credit for small businesses and adding 140,000 new jobs within the first year of enactment--all at no cost to the American taxpayer.
Two MBL cap lift bills, Sen. Mark Udall's S. 509 and Rep. Ed Royce's (R-Calif.) H.R. 1418, remain active in Congress. S. 509 has 21 cosponsors, and H.R. 1418 has 108 cosponsors.
CUNA has encouraged credit union advocates nationwide to discuss MBLs and other credit union issues with their legislators as they return to their home districts for the holidays. Congress is scheduled to end the 2011 legislative year on Dec. 16, but work could continue into next week.