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Newtek touts lifting MBL on iFox Biz Newsi
NEW YORK (7/7/11)--Barry Sloane, president/CEO of The Small Business Authority, appeared Thursday on Fox Business News as part of its series “The Government is Killing My Business” to discuss how lifting the credit union small business lending cap could infuse billions of dollars into the nation’s economy. The Small Business Authority, powered by Newtek is a CUNA Strategic Services provider. The Credit Union National Association (CUNA) and credit unions are pressing Congress to increase credit unions’ member business lending cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said. Sloane cited the $13 billion figure and emphasized the infusion would be free of government bailout funds or taxpayer subsidies. “That would be an incredible stimulus to the economy,” Sloane said. Despite the potential positive effects, banks have been lobbying to keep the credit union MBL cap at its current 12.25%, he said. The reason for the strong push-back: An increase in the credit union cap would represent a competitive threat to banks, Sloane said. The financial crisis showed that credit unions with the same exposure to residential mortgages as banks were at least as well-equipped manage the risk, Sloane said. Among the reasons for that was effective regulation by the National Credit Union Administration, he said. “Credit unions should be allowed to leverage their capital and deploy the dollars they have in small- and medium-sized business loans across the U.S., Sloane said. “Our economy has capital that can be used to go into small businesses without bailouts or subsidies.”
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