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Calif. newspaper MBL bill would increase CU loans to small biz
VENTURA, Calif. (7/22/10)--Several California business associations said passage of an amendment to a bill in the U.S. Senate proposing to increase credit unions’ member business lending (MBL) would be beneficial to the state’s stressed economy, the Ventura County Star said Wednesday. The amendment would increase business lending by $638 million in Ventura County, $1.8 billion in California and $10 billion nationwide, Bob Arnould, senior vice president of government affairs for the California Credit Union League, told the newspaper. “Anything that loosens up credit and funds for a business is beneficial,” Greater Conejo Valley Chamber CEO Jill Lederer, told the paper. “It’s one of the most frequent requests for help that we get from our members.” The current lending environment is not conducive to start-up businesses, Michael Scotto, chairman of the local SCORE chapter, which offers free counseling to small businesses, told the paper. Borrowers often can’t get a bank loan unless they have substantial capital, he added. “Under-financed small businesses is the No. 1 reason for small-business failure,” Scotto told the paper. Although Ventura (Calif.) County CU is listed as a “preferred lender” by the Small Business Administration, it hasn’t done small-business lending to date. However, new CEO Joe Schroeder wants to begin offering small-business lending and accounts once the credit union has the right system and expertise available to support it, the paper said. “All you and I ever hear is how banks aren’t lending to small businesses,” he said. “If credit unions smartly get into this business and start lending to small businesses in Ventura County, it will help the businesses [and] create jobs.” Credit union business lending has grown 15% in the past year, compared with an 11% decrease in bank business lending, according to the Credit Union National Association. The bill’s amendment would raise credit union’s MBL cap to 27.5% from 12.25%.
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