WASHINGTON (8/23/10)--A blog on Mainstreet.com
about credit unions' call to lift the cap on small business lending notes that big banks have begun lending more to small business to keep credit unions from business lending. Credit Union National Association President/CEO Bill Cheney says raising credit union's member business lending limit to 27.5% from 12.25% would pour $10 billion into the small business economy, creating 108,000 jobs in 2011, said the article, entitled "Credit Unions Call for Small Biz Lending Lift." While Congress "seems open to" the idea of lifting the member business lending cap as proposed in Sen. Mark Udall's (D-Colo.) amendment to the small business jobs bill, the "big banks don't like the idea," said the blog. "Bank of America and Wells Fargo have already started lending more to small businesses. So critics can say any move to raise lending limits for credit unions wouldn't have the impact CUNA says it would," the item said. "Raising the current cap on credit unions' business lending is an action which would benefit only half of one percent of all credit unions in the nation," said Rose Oswald Poels, senior vice president and counsel of the Wisconsin Bankers Association, the article reported. "Credit unions historically have not been big lenders to small business--CUNA estimates that only 23% of all U.S. credit unions offer commercial lending services," she added. The report cites a National Small Business Association study that indicates 41% of business owners can't get financing, an increase over the 22% who couldn't get financing in 2008. It also discusses points made in a recent CUNA white paper that cites "problems with the current small business financing framework in place, largely built by big banks." The points made:
* Commercial banks have no such business lending limits, and safety and soundness concerns are unfounded; * Small businesses find it increasingly difficult to obtain credit due to massive consolidation in the commercial banking arena, and those who obtain credit complain the banks' loan terms are less attractive; and * Current member business lending limits deter new entry into business lending.
For the full article, use the link.