SOUTHFIELD, Mich. (12/1/09)--Michigan Credit Union League President/CEO David Adams testified Monday before a House Financial Services subcommittee in Southfield, Mich., urging Congress to lift the cap on credit union member business lending. Rep. Gary Peters (D-Mich.), a member of the House Financial Services Committee, invited the subcommittee on Oversight and Investigations to examine small business lending with leaders from Michigan’s business and financial sectors, including Adams. Rep. Dennis Moore (D-Kansas) chaired the meeting. Reps. Peters, John Dingell (D-Mich.) and Mark Schauer (D-Mich.) also attended. Adams urged support for H.R. 3380, The Promoting Lending to America’s Small Business Act, which seeks to increase capital available to small businesses. Adams provided an example of a credit union in Schauer’s district that has reached its 12.25% cap but would like to continue lending. “While Michigan credit unions hold more than three-quarters of a billion dollars in small business loans, their authority could increase by as much as $1 billion if the federally imposed cap on member business lending were lifted by Congress,” Adams said. “Michigan’s credit union industry is prepared to assist Michigan’s small businesses further with their challenges in securing credit,” he added. “As of June 30, Michigan credit unions are funding more than 6,300 small business loans. Nearly 1,000 of these loans have been funded by credit unions since Jan. 1, totaling more than $100 million in new small business credit.” Credit unions’ small business loans have increased 72% during the past three years and 110% in Michigan during the same period. Credit union small business lending was up 17% in June over June 2008, while data indicate that bank business lending decreased during the third quarter for the fourth consecutive quarter, Adams said. Other points Adams made during the testimony:
* The Capital Purchase Program, which reduces the cost of capital to community banks, should be extended to credit unions so they can access the 3% cost of capital; * Increasing the Small Business Administration loan sizes to $5 million could be helpful, but would be most effective if the guaranty percentage remained at 90%; and * The Invest in America program, which provides discounts to those who receive financing from a credit union on an eligible new or used vehicle from General Motors and Chrysler, has facilitated 200,000 vehicle sales since its inception.
The Credit Union National Association supports the Promoting Lending to America’s Small Business Act. The act could put as much as $10 billion into small businesses, and create 108,000 jobs at zero cost to taxpayers, CUNA has said.