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Small biz stories highlight a day of MBL advocacy
WASHINGTON (11/29/12)--Dayton, Ohio-area real estate developer Jerry Bush said he might not still be in business today were it not for his credit union.

Click to view larger image Sen. Sherrod Brown (D-Ohio), far right, heard the stories of several Ohio business owners whose businesses have survived the recession and prospered with the help of credit union loans. (CUNA photo)

He was one of 500 small business owners and credit union advocates from across the country that stormed the halls of the U.S. Congress to urge legislators to give credit unions the freedom to grow their member business lending (MBL) portfolios, and help small businesses, during the Credit Union National Association's (CUNA) National Hike the Hill.

Bush, who runs his custom homebuilding business with the help of his two sons, said his operation is one of hundreds in the state that have seen trouble in a down economy. His credit union, RiverValley CU, came through and gave him the loans that allowed him to keep his business running in troubled times. However, Bush noted that some credit unions are prevented from offering loans to businesses in similar straits by the 12.25%-of-assets credit union MBL cap.

Click to view larger image Rep. Lloyd Doggett (D-Texas), center right, speaks with with Daniel La Rocca, owner of Austin trucking company Rigar International, Carol Huntberger of Quality seafood , also of Austin, and Austin-area credit union CEOs. (Texas Credit Union League photo)
In one of many Wednesday meetings between his Ohio Credit Union League-led group and members of Congress, Bush told Sen. Sherrod Brown (D) he would "talk to anybody" to support his credit union. "These guys are the only ones over there helping people like me, and there are thousands of us," Bush said.

Government and Political Affairs John Florian said his group's meeting with Portman was very productive.

Overall, banks are not making the types of loans that credit unions are making, several small business owners and credit union representatives stressed.

Click to view larger image A League of Southeastern Credit Unions-led group discusses MBLs with Rep. Spencer Bachus (R-Ala.). (CUNA Photo)
One such lending situation was covered in a Texas Credit Union League meeting with congressional staff. In that meeting, Harriet May--who is a former president/CEO of El Paso, Texas-based GECU and is currently president emerita of that credit union--said her credit union stepped in when it was needed. She recounted one $20,000 loan that GECU made to a nearby Mexican restaurant.

The owner only needed the small loan to buy chiles for the next year--and could not get such a loan from nearby banks. GECU worked with the restaurant owner to develop a loan arrangement that would work for both parties, and the restaurant owner was able to keep her business going. "That's what credit unions do," May said, adding that these efforts make a difference in the greater community.

Credit union advocates and business owners noted throughout the day that the business loans made by credit unions are not high-risk loans. Further, the business loans credit unions are making are not being taken away from banks… they are loans that banks are, in fact, giving up.

Click to view larger image The Michigan Credit Union League and Affiliates group pauses for a photo in front of the U.S. Capitol. The group was scheduled to meet with 14 legislators and their staff on Wednesday. (Michigan Credit Union League and Affiliates photo)
In a meeting between a League of Southeastern Credit Unions group and outgoing House Financial Services Committee Chairman Spencer Bachus (R-Ala.), Alabama CU COO Kayce Bell said her credit union does not advertise its business lending practices in Tuscaloosa. Borrowers come to her credit union on their own, she said, because they have been rejected by banks.

Senate legislation (S. 2231) that would increase the MBL cap from the current 12.25%-of-assets lending limit to 27.5% of assets could be considered any day during the lame duck session. Similar U.S. House legislation, H.R. 1418, has also been introduced, and that bill has 142 cosponsors.

If enacted, the MBL bills would help credit unions inject $13 billion in new funds into the economy. This money, which would be made available at no expense to taxpayers, would in turn help small businesses create over 140,000 new jobs in the first year after enactment.

CUNA President/CEO Bill Cheney this week stressed that how the MBL legislation gets passed does not matter. The point, he said, is making sure it passes. "This is the best chance that we have had in the past ten years to get this bill passed, once and for all," he said.

In support of the credit union, league and small business representatives hiking the Hill, CUNA has been running ads in Capitol Hill publications this week showcasing small business borrowers that credit unions helped when banks wouldn't.

The ad notes the Small Business Lending Enhancement Act is endorsed by the Conference of Mayors and almost 40 organizations committed to small business, and emphasizes that "it's time for Congress to enhance credit union lending to small businesses" by enacting the MBL bill.


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