WASHINGTON (4/20/12)--A group that identifies itself as a coalition of conservative, libertarian and free-market organizations voiced support Thursday for increased member business lending for credit unions and encouraged lawmakers to vote in favor of legislation that would achieve that end. The group called Sen. Mark Udall's (D-Colo.) Small Business Lending Enhancement Act of 2012 (S. 2231) "a sound, free-market, deregulatory action that will create jobs, help small business, and assist veterans."
S. 2231 would increase the MBL cap to 27.5% of assets from 12.25% of assets. The Credit Union National Association (CUNA) has estimated that lifting the MBL cap in this manner would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers. The legislation is expected to come up for a Senate vote soon.
The coalition said they support S. 2231 or "any similar measure lifting the arbitrary cap on member business lending by credit unions."
"As the economy is struggling to kick-start, this bill would give businesses much-needed capital to expand by simply raising the arbitrarily low lending cap," said the group's letter, that was widely distributed to lawmakers' offices on Capitol Hill.
The big winners, the letter said, will be small business owning job creators; but the group also noted that military veterans and their families would also be helped by the measure, as two of the largest credit unions in the credit union system work primarily with servicemen, servicewomen and their families.
The bill "would allow many well-capitalized smaller credit unions to expand business lending," and would not harm the banking industry, the coalition noted.,
"Most of the new credit loans will almost certainly go to businesses that wouldn't get any loans at all today, and credit unions would specialize in serving the types of businesses of their member populations," the letter said.
The letter was cosigned by Heartland Institute Vice President Eli Lehrer, Competitive Enterprise Institute Senior Fellow for Finance and Access to Capital John Berlau, Americans for Tax Reform President Grover Norquist, Less Government President Seton Motley, Citizen Outreach President Chuck Muth, Institute for Liberty President Andrew Langer, American Commitment President Phil Kerpen, Freedom Research Foundation President Jack Wheeler, Freedom Action President Myron Ebell, 60 Plus Association Chairman Jim Martin, and Council for Citizens Against Government Waste President Thomas Schatz.
The Consumer Federation of America (CFA) this week also spoke out in support of an MBL cap increase. CFA Executive Director Stephen Brobeck in a letter sent Wednesday to members of the Senate said MBL cap increase legislation "would be particularly beneficial at this time," and would "benefit consumers both by promoting competition and innovation in local marketplaces and by strengthening credit unions."
The CFA said MBL legislation would "expand access to affordable credit for small businesses and help strengthen local marketplaces that serve consumers well." (See related April 19 News Now story: CFA asks senators to support MBL cap increase.)
A vote is expected soon in the Senate, with a House vote to follow.
For the full letter, use the resource link.