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.