WASHINGTON (5/17/13)--Sen. Mark Udall's (D-Colo.) Small Business Lending Enhancement Act (S. 968), introduced on Thursday, "would allow credit unions with experience in business lending to continue to lend to their small business members, without increasing the size of government," Credit Union National Association President/CEO Bill Cheney said.
Udall's bill would increase the credit union member business lending (MBL) cap to 27.5% of assets, from the current 12.25%-of-assets level. Credit unions would need to be in good standing, and have a history of making business loans, to qualify for the cap increase. They would also need approval from the National Credit Union Administration.
The legislation tells credit unions that stood with their business-owning members during the recent Great Recession to "keep lending; keep serving the bakeries, the gas stations, the florists, and the carpenters; keep helping the restaurant owners, plumbers, realtors, independent grocers and shopkeepers," Cheney noted in a Thursday letter thanking Udall.
"The bill will not endanger the small banks in your community; the bill will not alter the nature or focus of credit unions; the bill is not inconsistent with the credit union mission or the purpose of their tax status. This legislation recognizes that credit unions are working in their communities to help small businesses, and it is important to enact even though the bank lobbyists oppose it," Cheney added.
CUNA estimates the MBL cap change would help credit unions lend an additional $13 billion to small businesses in just the first year after enactment. This money, which would be made available at no expense to taxpayers, would in turn help small businesses create around 140,000 new jobs.
"Credit unions have an important role to play, lending to startups and Main Street businesses alike. My bill helps to unleash their potential to ensure that job creators in Colorado and across the country have the capital they need to start a business or to grow," Udall said in a release.
Udall's bill currently has 14 co-sponsors: Sens. Mark Begich (D-Alaska), Barbara Boxer (D-Calif.), Sherrod Brown (D-Ohio), Susan Collins (R-Maine), Kirsten Gillibrand (D-N.Y.), Martin Heinrich (D-N.M.), Angus King (I-Maine), Pat Leahy (D-Pa.), Bill Nelson (D-Fla.), Rand Paul (R-Ky.), Jack Reed (D-R.I.), Bernie Sanders (I-Vt.), Charles Schumer (D-N.Y.) and Sheldon Whitehouse (D-R.I.).
Reps. Ed Royce (R-Calif.) and co-sponsor Carolyn McCarthy (D-N.Y.) released similar legislation early this year. That bill, H.R. 688, has 94 co-sponsors.
"Credit unions have capital to lend, a history of prudent and safe small business lending, and a mission to help provide access to credit to their members--including their small business-owning members. They just need Congress to act," Cheney said.
For CUNA's letter to Udall and more on the bill, use the resource links.