GLASTONBURY, Conn. (9/20/12)--"Big bank policies are limiting the ways that Main Street banks and credit unions can generate income and lend to small businesses, while subjecting them to onerous compliance burdens," an entrepreneur specializing in banking technology wrote in an opinion-editorial in Fox Business Monday.
The article entitled "Preserving the American Dream Through Small Businesses" was written by Louis Hernandez Jr., CEO of Glastonbury, Conn.-based Open Solutions, a bank technology firm that serves credit unions and banks.
"These and other policies are also harming small businesses by limiting their access to capital and burying them under regulations that consume valuable resources and increase operational costs," Hernandez wrote.
Noting that he is an "entrepreneur who has benefitted greatly from the American Dream," Hernandez wrote that he is "troubled to see the tenets of this dream--owning a home, getting an education, having a job or owning a business, and achieving financial self-sufficiency--being crushed by regulations that are killing small businesses and community-based financial institutions that support them."
Community-based institutions disproportionately finance small business growth, which create the majority of new jobs, he wrote.
"The importance of Main Street financial institutions, which drive the national economy one community at a time, cannot be underestimated," Hernandez said. "By financing the small businesses that create 65% of new jobs, they drive consumer spending, which represents about 70% of the U.S. economy."
Community-based financial institutions can collaborate with each other, upgrade their tedchnology infrastructure, and create greater awareness of their role in the national economy, he said, noting he has written a book, Saving the American Dream: Main Street's Last Stand, which includes credit unions and community banks explaining how their institutions make a difference to small businesses and job growth.
In the article, he cited as an example Beacon CU, a $962 million asset credit union in Wabash, Wash., which gave a fresh start to a mom-and-pop office supply shop bankrupted by the recession. Today that business plays an important role in its community.
To access the full article, use the link.
The Credit Union National Association (CUNA) and credit unions nationwide are urging the House and Senate to pass measures that would introduce roughly $13 billion in new small business loans and help create 140,000 new jobs the first year. Congress can allow credit unions to help the economy simply by raising the member business lending cap for credit unions to 27.5% of assets from the current 12.25%, at no cost to the taxpayer, said CUNA.