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Wisconsin bankers swipe at CUs shameful--league
PEWAUKEE, Wis. (8/26/10)--Wisconsin bankers' latest swipe at credit unions--claiming that co-ops need to expand their outreach to the underserved--is "another sorry attempt to deflect from the fact that credit unions' business lending benefits the very people banks turn away," said the Wisconsin Credit Union League. The league responded to a press release sent Wednesday by the Wisconsin Bankers Association, which said tax-exempt credit unions should expand outreach to the underserved rather than ask Congress for "additional advantages." (For the bankers' full press release, use the link.) "What an irony that banks suggest credit unions do more to serve the financially underserved," said Brett Thompson, league president/CEO. "Isn't that just what credit unions are trying to do in making more business loans available to small businesses that can't get loans from banks?" Thompson called banks' claim that they do a better job than credit unions in serving the underserved "outrageous," adding that "banks have virtually shut off the credit spigot for small businesses, creating a void that credit unions can't completely fill under current law." Credit unions grant the kind of small loans--averaging around $174,772--that banks won't. Also, credit unions make most of their business loans to households with incomes below $50,000, said the league. Wisconsin banks' business lending dropped 19% from March 2009 to March 2010. Credit unions increased their lending by 11% but many have maxed out what they can lend due to the 12.25% of assets limit on their member business lending. "Federal regulators and the Obama administration have expressed support for legislative language that would raise the cap to 27.5% of total assets," said the league, adding that banking trade groups oppose it. Credit unions return $200 million to members annually through better rates and lower or fewer fees. More consumers--including the financially underserved--have flocked to credit unions during financially challenging times because credit unions will help people in ways that banks won't," the league concluded. For the full press release, use the link. The Credit Union National Association supports Sen. Mark Udall's (D-Colo.) amendment to the Small Businesses Lending Fund Act, HR 5297, which is currently stalled in Congress. The amendment would increase the current cap to 27.5%.
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