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Indiana MBLs rose 50 since 2007 league tells paper
FORT WAYNE, Ind. (8/16/11)--Member business lending (MBL) at Indiana credit unions has risen 50% since 2007, indicating "businesses more and more are looking to credit unions for business loans," John McKenzie, president of the Indiana Credit Union League, said in the Sunday issue of the Journal-Gazette. The article, "Lenders battle for businesses," outlines credit unions' push to raise the MBL cap to 27.5% of assets from 12.25% so they can be the lenders of choice for America's small businesses while assisting the economy with a $13 billion influx in new small business loans and helping create 140 million new jobs without cost to the taxpayer. With credit unions and banks competing for small business loans, local companies might be able to lock in a loan at an attractive interest rate, said the Fort Wayne, Ind., newspaper. Since the beginning of the recession, credit union lending to businesses rose 39% nationally and 50% in the state, McKenzie told the publication. More than 50 Indiana credit unions offer business loans--a decision made by each member-owned organization. Dollarwise, Indiana credit unions have made $1.5 billion in business loans, representing 13% of all credit union lending in the state. "Businesses more and more are looking to credit unions for business loans," McKenzie said. Raising the MBL cap would raise state credit union lending capacity by $364 million in the first year of the phased-in increase and would create more than 4,000 jobs, he added, noting that businesses need access to credit. The newspaper also interviewed a Fort Wayne, Ind. credit union which said it has had to turn down some loans because it is bumping against the MBL cap and the Indiana Bankers Association about banks' opposition to lifting the MBL cap. McKenzie also pointed out that the usual lending standards apply when credit unions lend to businesses. The goal is to make good loans that get paid back, he said, adding, that businesses applying for credit union loans are solid borrowers. The Indiana Chamber of Commerce said that bank lending decreased nationally by more than 14% from Dec. 31, 2007, to March 31. During that same time, business loans from credit union rose by nearly 12%. The chamber also pointed out that credit unions' total business lending as of March 31 was less than 2% of the bank total, or $14.8 billion compared to more than $1 trillion. For the full article, use the link.
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