MADISON, Wis. (3/30/12)--Credit unions in Michigan urged their congressional delegates "to take quick action in support of a proposal that will strengthen small businesses, jumpstart local economies and create jobs." Likewise, Pennsylvania credit unions are asking their lawmakers to support the Credit Union Small Business Jobs Bill, S. 2231, when it comes up for a vote soon.
Senate Majority Leader Harry Reid (D-Nev.) has indicated he will hold a vote on Sen. Mark Udall's (D-Colo.) credit union member business lending bill S. 509. The legislation, now S. 2231, is on a fast track, with a vote expected soon. The bill would increase credit unions' member business lending cap to 27.5% of assets from the current 12.25%.
"We all can agree that credit unions need a win, and fortunately that time is now," said Pennsylvania Credit Union Association (PCUA) President/CEO Jim McCormack. "This will be the first time a stand-alone credit union bill will be considered on the floor since 1998, when the Senate voted on H.R. 1151 (the Credit Union Membership Access Act). The credit union full court press on District and Washington Senate Offices must start now," he said in PCUA's newsletter (Life is a Highway March 29).
Michigan's credit unions say that small business needs the law. "Small businesses in Michigan and across America are the engines of employment and economic growth--and these small businesses need relief from a credit crunch that is holding them back," said David Adams, president/CEO of the Michigan Credit Union League (MCUL) & Affiliates.
"Michigan's credit unions have consistently stepped up to support small businesses at a time when other lenders have stepped back. Credit unions can and want to do more to help get Michigan and America working and competing again, and that's why it's critical that the U.S. Senate pass" the bill, he added.
"One of the best ways to help small businesses get access to capital so they compete and create jobs is to unleash credit unions' full potential to support small businesses. That requires removing an arbitrary, irrational and counter-productive limit on small business lending," Adams said in a press release. "Credit unions want to play a greater role in strengthening the economy of Main Streets across Michigan and America," he said, noting that the bill is "vital to making that happen."
Michigan has an estimated 180,000 small businesses, 158,000 of which employ fewer than 20 people, according to the Small Business Administration. Small businesses represent 98.3% of Michigan employers and are responsible for 51.6% of private sector jobs in the state. "In Michigan, 90% of businesses fail by their 10th year, largely because they lack guidance; 80% fail because they don't have access to capital," said MCUL.
The league said that data show increased small business support from Michigan's credit unions comes as bank lending has remained sluggish since the 2008 recession. Federal Deposit Insurance Corp. data indicate that U.S. banks' small business lending continued to decline in fourth quarter of 2011, and that year-over-year bank small business loans outstanding declined by nearly 5% in 2011, said the Michigan league.
If approved, the bill, which is opposed by banks, would inject $13 billion in new small business loans into the economy and help create as much as 140,000 new jobs without cost to the taxpayers, said the Credit Union National Association (CUNA). CUNA and more than 4,000 attendees of its Governmental Affairs Conference last week visited legislators on Capitol Hill to urge passage of the bill.