WASHINGTON (12/2/11)--Credit unions will be "very concerned" if legislation that would increase the credit union member business lending cap does not move forward, especially if two other bills -- ostensibly meant to spur job creation – do, the Credit Union National Association (CUNA) said in a Thursday letter to Senate Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Member Richard Shelby (R-Ala.).
The letter was submitted for the record of a Thursday committee hearing on two Senate legislative vehicles: S. 556 and S. 1791.
S. 556, which is sponsored by Sen. Kay Bailey Hutchison (R-Tex.) and has nine cosponsors, would increase the shareholder threshold for registration with the Securities and Exchange Commission from 500 shareholders to 2,000 shareholders. S. 1791, which is sponsored by Sen. Scott Brown (R-Mass.) and has two cosponsors, would provide registration exemptions for certain crowdfunded securities.
Cheney in the CUNA letter said while these two bills – which have been termed job-creation vehicles – may ultimately be part of the solution to the nation's current job market issues, "credit unions should be encouraged and permitted to help as well."
Cheney added that S. 556 and S. 1791 "would appear to reduce regulatory scrutiny and investor protections," while creating jobs. However, under MBL cap lift legislation, job creation could be accomplished through qualified, well-managed and effectively regulated credit unions, he said.
CUNA has estimated that increasing the current 12.25% of assets MBL cap to 27.5% of a credit union's total assets would have a number of beneficial effects on the ailing economy, including infusing $13 billion in new credit for small businesses and adding 140,000 new jobs within the first year of enactment--all at no cost to the American taxpayer.
Two MBL cap lift bills, Sen. Mark Udall's S. 509 and Rep. Ed Royce's (R-Calif.) H.R. 1418, remain active in Congress. S. 509 has 21 cosponsors, and H.R. 1418 has 104 cosponsors.