WASHINGTON (5/23/13)--Credit union member business lending (MBL) legislation should be cheered not just because of its bipartisanship, but because it "spreads freedom" and "lifts regulatory barriers to an untapped source of capital for startups: America's credit unions," Competitive Enterprise Institute Senior Fellow for Finance and Access to Capital John Berlau wrote in a recent openmarket.org blog post.
Berlau in his post noted that credit unions have stepped up to fill the funding void felt by many small businesses and startups. "But because of government barriers to credit union business lending, thousands of entrepreneurial ventures may be unnecessarily deprived of the seed capital credit unions could provide to them," he wrote.
U.S. House (H.R. 688) and Senate (S. 968) bills would help rectify this situation by increasing the credit union MBL cap from 12.25% of assets to 27.5%. The Credit Union National Association has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.
"The modest hike in the lending cap would pay big dividends for entrepreneurs and the economy," Berlau wrote.
S. 968, which was introduced by Sen. Mark Udall (D-Colo.) earlier this month, currently has 14 co-sponsors. H.R. 688, introduced by Reps. Ed Royce (R-Calif.) and co-sponsor Carolyn McCarthy (D-N.Y.), has 94 co-sponsors.
For the full CEI piece, use the resource link.