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CUNA urges senators for MBL bill support
WASHINGTON (3/9/11)—The Credit Union National Association (CUNA) wrote key senators Tuesday to thank them for their support of “commonsense economic recovery and job creation” through their sponsorship of legislation that would increase the credit union member business lending cap to 27.5% of total assets, up from the current 12.25% limit. The letter was first sent to Sen. Mark Udall (D-Colo.), who drafted MBL legislation introduced in the Senate Tuesday, and to his primary co-sponsors, Sens. Olympia Snowe (R-Maine) and Charles Schumer (D-N.Y.). It was also sent to all Senate offices later in the day, to outline the benefits to the economy represented by the bill. (See related story: MBL bill introduced in Senate.) The letter recaps the 100-year history of credit unions serving the credit needs of their small business-owning members, and how it was just since 1998 that an “arbitrary statutory cap” was imposed. “In an effort to promote economic recovery and job creation, we strongly urge Congress to increase the credit union member business lending cap,” the CUNA letter said, adding, “While not the largest portion of credit union lending, small business lending is the fastest growing segment of credit union lending by a significant margin.” CUNA said it’s most recent research conservatively estimates that the MBL cap is lifted by Congress to 27.5% , credit unions could lend an additional $13 billion to small businesses in the first year after implementation, helping them to create nearly 140,000 new jobs. “To be clear,” the letter from CUNA President/CEO Bill Cheney said, “credit unions do not need taxpayer money to lend more to small businesses: they need the authority from Congress to do so.” The letter also noted bankers’ objection to increased business lending for credit unions. “Let’s face it: the banker’s objection is rooted in their fear of competition, which given the circumstances is relatively hollow,” Cheney wrote. “Credit unions currently hold 5% of the small business loans issued by depository institutions. We believe that many of the additional business loans granted by credit unions once the cap is increased would not be loans otherwise made by banks,” He added. Cheney said for the most part the loans supplied by credit unions would generally be “too small for a bank to consider” and would go to “borrowers unwilling to deal with a bank.” “However, even if all of the new credit union loans would have been made by banks, and if credit union business lending doubled (both quite unlikely), that would still leave banks with 90% of the business lending market,” Cheney said. More importantly and more troubling, Cheney added, is that the bankers’ rhetorical arguments miss the point of this legislation entirely. “This legislation is not about credit unions; it is about helping small businesses access credit.”


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