WASHINGTON (9/1/09)--A member business lending (MBL) blog addresses credit unions' efforts to get a bill passed so they can serve small business at a time when capital is tight and why it might succeed. Monday's article in Inside Business, entitled "Credit unions try to seize the moment," says that in some congressional bills of the past, credit unions have asked for comprehensive regulatory relief in several areas. However, the current bill--Promoting Lending to America's Small Businesses Act of 2009 (HR 3380)--addresses only business lending. It argues that because of the lack of credit from other institutions during the recession, the 12.25% of assets MBL cap credit unions have should be raised to 25% of assets. In an environment where the government has bailed out the financial sector, the bill reinforces credit unions' message that they have remained stable. The article quotes bill sponsor Rep. Paul Kanjorski (D-Pa.) saying that permitting credit unions to expand their lending to small businesses can "work to turn around our difficult financial situation at no cost to taxpayers." Karin Sherbin, director of governmental affairs at the Virginia Credit Union League, notes that credit unions made a political compromise in 1998 by agreed on the to get the Credit Union Membership Access Act passed. Sherbin says the cap was "to throw a bone to the banking industry. We see it as not being grounded at all in good public policy. It was just politics." Craig Zuidema, vice president of lending at ABNB FCU, Chesapeake, Va., noted that there is enough business for everyone. Credit unions don't have the advantages that banks say they do when they complain about credit unions' tax exemption. "If credit unions were so attractive and had so many advantages, why hasn't a single bank ever converted to a credit union?" Zuidema says in the article. The article also cites statistics provided by the Credit Union National Association on net charge-offs. At credit unions, the net charge-off on business loans was 0.33% of total loans in 2008, compared with 1.11% at banks. CUNA projects that within the first year of the potential cap increase, an additional $10 billion will be injected into the economy. Use the link to view the entire article.