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Washington
Credit gap MBL cap lift fight continue CUNA
WASHINGTON (5/2/11)--“Increasing the member business lending cap remains a top priority, especially in light of the country's continuing need for new sources of credit for small businesses,” Credit Union National Association (CUNA) Vice President of Legislative Affairs Ryan Donovan said. Credit union lending is growing, and could grow even faster if legislation that could lift the MBL cap to 27.5% of total assets is approved by Congress. CUNA Senior Economist Mike Schenk told Northwestern University’s Medill Reports that banks continue to pull back from lending to small businesses, “but in contrast, credit union portfolios are growing fairly strongly.” H.R. 1418, which would lift the MBL cap to 27.5%, was introduced by Reps. Ed Royce (R-Calif.), Carolyn McCarthy (D-N.Y.), Russ Carnahan (D-Mo.), Hank Johnson (D-Ga.) and Gary Peters (D-Mich.). The bill had 12 cosponsors as of Friday. Similar legislation (S. 509) was introduced by Sens. Mark Udall (D-Colo.) and Olympia Snowe (R-Maine) in March. That bill had 18 cosponsors as of Friday. Schenk said that lifting the cap from the current 12.25% of total assets to 27.5% of assets “could land up to $13 billion in additional loans and 140,000 jobs throughout the nation in the first year after the cap is raised.” Schenk added that credit unions’ high quality loan portfolios put them “in a better position to lend.” The Washington Post has also noted the scarcity of funds that are currently available to small businesses, and reported last week on banks reluctance to lend to small business. For both stories, use the resource links.
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