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Mica urges president Let CUs continue to help small businesses
WASHINGTON (10/23/09)—Credit union small business members are turning to their credit unions for loans because they cannot find credit elsewhere, including at banks, Credit Union National Association (CUNA) President/CEO Dan Mica wrote to President Barack Obama Thursday. Mica offered CUNA’s wholehearted support of small business initiatives announced by the president on Wednesday, which included increased loan limits for key Small Business Administration (SBA) programs. Mica volunteered CUNA to work with the U.S. Treasury Department, SBA and U.S. Congress to “achieve higher limits for key SBA programs, such as 7(a) and 504 programs today.” In his letter, Mica underscored to Obama that credit unions have continued to support the credit needs of their communities during the country’s economic crisis and noted that credit union member business lending (MBL) activity grew by 14% for the 12-month period ending in June. “However,” Mica urged the president, “this growth cannot continue because of the statutory cap on credit unions' aggregate MBLs. Credit unions have a ceiling on the amount of member business loans they can make -- 12.25% of total assets -- despite very low MBL loss rates. We estimate that if the cap is eased, approximately $10 billion could be provided in new small business loans.” Mica urged administration and congressional support for H.R. 3380, the Promoting Lending to America's Small Businesses Act, to increase the MBL cap to 25% of a credit union's total assets. It also would raise the "de minimis" threshold for a loan to be considered a "member business loan" to $250,000, and exempt loans made to non-profit religious organizations as well as loans made in qualified underserved areas from the cap. The Mica letter was also sent to the attention of U.S. Treasury Secretary Timothy Geithner, SBA Administrator Karen Mills, National Credit Union Administration Chairman Debbie Matz and U.S. Treasury Assistant Secretary for Financial Institutions Michael Barr.
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