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CUNA makes MBL case on IFox BusinessI
LAS VEGAS (7/15/10)--Credit unions have a “long and storied” history of making loans to small businesses since their inception 100 years ago, and could help businesses even more if their member business lending caps were raised, a Credit Union National Association (CUNA) economist told Fox Business Wednesday. “We have continued to lend through the economic downturn,” Mike Schenk, CUNA vice president of research and statistics, told Fox. “Member business lending (MBL) portfolios are growing faster than any other segment, and credit unions have reported double digit gains [in MBLs] in each of the past 12 years.”
Credit unions have increased their business loan portfolios by 10% in the past year, while commercial banks have seen a contraction of 10%. March 2010 data also indicates that loan loss rates at credit unions are “one-third of what we see in the commercial banking sector,” he said. Many small businesses cannot get loans, Schenk continued. “We have data from the [Federal Reserve Board] that shows commercial banks have changed their underwriting criteria, making it more difficult for those loans to be made.” CUNA and credit unions are lobbying to raise their lending cap--currently at 12.25%. Sen. Mark Udall (D-Colo.) has introduced an amendment that is before Congress that would lift the cap to 27.5%. “We believe that [raising the cap] would help credit unions inject another $10 billion into the economy and create another 100,000 new jobs,” Schenk said.
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