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Washington
Cheney writes Small Business Committee on MBL cap
WASHINGTON (6/2/11)--Credit unions stand ready to help businesses grow and to create jobs – and could lend an additional $13 billion to small businesses in the first year if legislation to raise their authority to make business loans is passed, Credit Union National Association (CUNA) President/CEO Bill Cheney told members of the House Small Business Committee in a Wednesday letter. The letter was sent to committee chairman Rep. Sam Graves (R-Mo.) and ranking member Rep. Nydia Velazquez (D-N.Y.), and was submitted for the record of a Wednesday hearing entitled “Access to Capital: Can Small Businesses Access the Credit Necessary to Grow and Create Jobs?” H.R. 1418, which was introduced by Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) earlier this year, would lift the credit union member business lending cap to 27.5% of total assets, creating as many as 140,000 new jobs at no cost to taxpayers. While the regulations that H.R. 1418 would address do not fall under the jurisdiction of the small business committee, Cheney encouraged committee members to support the legislation. The CUNA letter noted that “credit unions have proven the ability to do small business lending safely and soundly, demonstrating remarkably lower charge-off and delinquency rates than banks making business loans,” and added that credit unions have increased their work with small businesses in recent years as banks have limited their business lending portfolios. Cheney pointed out that, today, many credit unions are rapidly approaching the extant 12.25% cap on total business lending imposed by law on credit unions, while others choose not to engage in business lending because of the cap. In spite of the 12.25% cap, business lending is the fastest growing segment of credit union lending. For the full letter, use the resource link.


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