MADISON, Wis. (4/13/12)--The number of new businesses formed in Wisconsin in the first quarter increased by 12.2%, compared with the same period in 2011, according to data released April 9 by the Wisconsin Department of Financial Institutions (DFI). That growth is due in part to assistance from credit unions, said the Wisconsin Credit Union League.
In the first quarter 9,821 new businesses were formed in Wisconsin, compared to 8,752 during the same period in 2011.
March showed a 4.3% improvement over 2011, the 10th time in the past 12 months that new business activity has increased over the previous year, said the DFI, which regulates state-chartered credit unions and banks.
Since the start of the recession in 2007, Wisconsin banks increased their business loans a mere 5%, while state credit unions grew member business loans (MBL) by 52.3% to compensate, noted Brett Thompson, league president/CEO.
"During challenging economic times, many discouraged job seekers are more likely to form businesses," Thompson said. "And that means credit unions that make loans to them are helping 'Main Street' Americans. For example, the Treasury Department found that 25% of credit unions' business loans were made to members with household income of less than $30,000 and another 20% went to households with incomes between $30,000 and $50,000."
The Credit Union National Association (CUNA) and credit unions are urging Congress to increase the MBL cap to 27.5% of assets from 12.25%. Doing so, would inject $13 billion in the U.S. economy for small business lending. That, in turn, would create 140,000 new jobs at no cost to the taxpayer.
Legislation to increase the cap is active in both the U.S. Senate and the House, and a vote on S. 2231 is expected to take place after Congress returns from its spring recess, said CUNA.