WASHINGTON (12/15/09)--As President Barack Obama met with bankers Monday to urge them to loosen unnecessary restrictions on credit to help the economy recover, credit unions pointed out that they are, in fact, lending to business – and could be doing much more. In fact, according to Credit Union National Association (CUNA) President/CEO Dan Mica, credit unions could be pumping more than $10 billion into the economy and creating more than 108,000 jobs if Congress would agree to expand credit union capacity to make business loans. However, Mica pointed out, “The very people who met with the president today are the same people who oppose allowing credit unions to help.” “The only lobbyists who oppose giving credit unions the opportunity to do more small business lending represent the banks with whom the president met today,” Mica said. “That’s right: The same ‘fat cat’ bankers -- as President Obama put it on national television Sunday night -- who accepted billions of dollars of taxpayer money while restricting access to credit for consumers and small businesses, oppose allowing well-capitalized, not-for-profit credit unions to lend money to their small business-owning members. “It is absolutely unconscionable that these bankers would block credit unions from helping the nation, while simultaneously being rebuked by the president for not doing enough to help. Were we in the room, the president could have easily pointed to us and said ‘these guys want to help – why can’t you be more like them?’” Mica noted that credit unions have worked closely with both the U.S. Congress and the Obama administration as financial regulatory restructuring legislation has taken shape, looking out for credit union interests – but choosing to remain neutral on the overall bill. “By not opposing the regulatory restructuring bill in the House, we kept the door open to the administration to work on our needs,” Mica said. He pointed out that credit unions are part of the solution for consumers, and now is the time to let them be part of the solution for their members who own small businesses. “Credit unions are subject to a 12/25% -of-assets statutory cap on the amount of small business lending they can do. This cap restricts not only the credit unions which are approaching the cap, but it also discourages other credit unions from offering this type of lending to their members. There is no economic or safety and soundness rationale for the cap. “In fact, recently the top federal regulator for credit unions -- the chairman of the National Credit Union Administration -- endorsed lifting the statutory cap,” Mica added. Mica noted that credit unions are joined in their quest for more business lending capacity by groups across the political spectrum, as well as those representing business itself, including:
* Americans for Tax Reform * League of United Latin American Citizens (LULAC) * National Association of Manufacturers * National Cooperative Business Association * National Association for the Self-Employed * National Association of Mortgage Brokers * Competitive Enterprise Institute
Mica reminded that credit unions are urging Congress to support HR 3380, introduced by Rep. Paul Kanjorski (D-Pa.) and Rep. Ed Royce (R-Calif.), which would increase the capacity of credit unions’ business lending by raising the statutory cap on business loans to 25% of assets, and treat as business loans only those of $250,000 or less, up from the current ‘de minimus’ amount of $50,000.