WASHINGTON (3/7/12)--The Credit Union National Association (CUNA) has urged Senate Banking Committee leaders in a letter to include provisions to expand authority for credit union member business lending (MBL) in any new jobs and capital formation legislation they will be considering--and to reject banker pleas to keep the credit union legislation out of the package.
CUNA also has launched an Action Alert to encourage and assist credit unions in contacting their senators to seek lawmakers' support for adding an MBL cap increase to any Senate small-jobs package as a "common sense" way to boost the economy by helping small businesses and creating jobs.
In the letter to Senate Banking Committee Chairman Tim Johnson (D-S.D.) and ranking member Richard Shelby (R-Ala.), CUNA President/CEO Bill Cheney noted that the only opposition to the credit union member business lending bill (S. 509 ) comes from organizations representing the banks that pulled back access to credit from their small business customers during the financial crisis.
Cheney also reminded the committee leaders that the banks that oppose S. 509 are "the same banks Congress bailed out in 2008 with TARP, the same banks to which Congress made available $30 billion of taxpayer money to lend to small businesses, the same banks that took only a fraction of that money and used most of what they took to refinance their TARP obligations."
The CUNA leader added that, today, these banks are asking Congress for reduced regulatory burden with a promise that the changes they seek will benefit small businesses. "At the same time, the American Bankers Association says it would rather see this committee's effort fail than to see S. 509 enacted into law," Cheney wrote.
"After devastating the housing market, retreating from the small business market, receiving taxpayer bailout after taxpayer bailout, being begged by the government to lend to small businesses and refusing that call, America's banks now come to Congress with the message: they will oppose their own regulatory relief legislation if Congress allows the credit unions to provide more assistance to small businesses," the CUNA president wrote.
CUNA estimates show that during the first year after enactment of legislation to increase the MBL cap to 27.5%, up from the current 12.25%, small businesses would see a $13 billion infusion of new credit and the general economy would witness the creation of 140,000 new jobs--all at no cost to taxpayers.
"It is clear: the banks are not interested in spurring growth through capital formation. They would rather see their legislation wither on the vine than see well-capitalized and experienced credit unions increase their lending to small businesses." The CUNA letter was sent as the Senate's banking panel convened Tuesday to discuss initiatives that could create job growth during the second of a series of hearing entitled "Spurring Job Growth Through Capital Formation While Protecting Investors."
Use the resource links to read the complete text of Cheney's letter, view CUNA's comprehensive response to banker assertions about credit union business lending, and access CUNA's Action Alert.