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News Now

CU System
CUs MBL creates 25 jobs
WYOMISSING, Pa. (11/2/10)--A credit union's member business loan (MBL) will help create 25 jobs in its area at a time when banks are lending less, according to the Reading (Pa.) Eagle (Oct. 31). Discovery FCU, based in Wyomissing, Pa., assisted a couple in expanding their restaurant business and creating 25 new jobs, according to Edwin L. Williams, president/CEO of the $134 million asset credit union. The Reading Eagle picked up the story about restaurant owners Joseph A. and Carol J. Nemec, who will open a Johnny & Hon's Smokehouse in the city later this month. The Nemecs own similarly named restaurants in Muhlenberg Township and Robesonia, and plan to hire 15 to 20 new employees during the winter, with the rest hired in the summer, said the article. The credit union had been making MBLs for less than a year and the loan to the Nemecs was the first loan it closed, Williams told the Credit Union National Association (CUNA). The Nemecs renovated a vacant floral shop that had been vacant for three years, he added. The Nemecs were so grateful to get the loan that they plan future loans with the credit union to refinance their other restaurants, said Williams. "Imagine what credit unions can do to create even more jobs in the lending cap were expanded," he said, referring to credit unions' push to increase their MBL cap to 27.5% from 12.25% of assets. In other business lending news, CBS News' "60 Minutes" featured an episode on Newton, Iowa, a heartland town hit hard by the recession. At one point a small business owner comments on his inability to get a loan from area banks. Lending to small businesses actually dropped by $13 billion or 2% during second quarter 2010, the segment said. "So three years after the beginning of the Great Recession, with interest rates the lowest have ever been in history, banks are lending less money to the engines that create jobs," said commentator Scott Pelley. One businessman, Dave McNeer, told Pelley he had gone to a bank, which "won't loan me a dime." The bank said to "come back when you have a couple of good years behind you. Really? 'Cause I won't need you then." Another business owner, Alan Yegge, told Pelley, "You know they'll offer money to you when you don't need it. But when you need it, you can't get it."


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