WASHINGTON (4/4/12)--Lawmakers should cast aside bankers' objections to increasing the credit union member business lending (MBL) cap and recognize that supporting MBL legislation is all about helping small businesses, Credit Union National Association (CUNA) President/CEO Bill Cheney wrote in a Daily Caller blog post Tuesday.
Increased lending to small businesses "shouldn't be about banks versus credit unions," Cheney said.
Legislation that would increase the MBL cap for credit unions from 12.25% of assets to 27.5% of assets is active in both the U.S. House and the Senate, and a vote on S. 509, the Senate bill, is expected to take place once Congress returns from its spring recess. Cheney said "the reality is that credit unions have money to lend, their track record is considerably better than the banks, and freeing up credit unions to do more will enhance competition and marketplace choice."
Banks have kicked their opposition into high gear in advance of this vote, with American Banker Association-backed radio ads playing frequently in Washington, D.C.-area radio markets. The ads, Cheney said, feature bankers grumbling about credit unions but show no concern about what banks would do for small business. "It's not like they haven't had a chance to do something," he said.
Cheney noted that banks currently control 95% of the small business lending market, but said many would think that number was actually 0.95% "the way they have been carrying on in opposition to a bipartisan bill that would let credit unions do more small business lending." Bankers have also continued to complain about the credit union nonprofit tax status during this debate, but those complaints "strike an incredibly false note given the enormity of the taxpayer bailouts that went to their industry," Cheney said.
Credit unions hear all the time from small business owners who have received no help from banks on the credit front, Cheney said, citing a Small Business Majority surveys that in February found 60% of small businesses say it's still too difficult to get a loan. Cheney also noted a January National Federation of Independent Business (NFIB) report that showed a 9% increase in the amount of small businesses that wished to borrow from financial institutions, but no corresponding change in the number of small businesses obtaining credit. NFIB concluded that "the more competition that exists, the more likely small-business owner customers will receive sympathetic consideration for their loan requests, favorable rates (and terms and conditions), and better service, other factors equal."
More competition is sure to ensue if Congress passes S. 2231, the Credit Union Small Business Jobs Act, and Cheney said credit unions are currently working to convince their legislators to lift the cap and let them help their local businesses. Approval of MBL legislation would free up credit unions to make $13 billion in new loans to small businesses in just the first year, giving these businesses the wherewithal to create an estimated 140,000 new jobs, all by simply raising a cap — no expense to the U.S. taxpayer involved, Cheney said.
The Daily Caller is an online news and opinion site co-founded by 20 year print and broadcast journalist Tucker Carlson. For the full post, use the resource link.
Pro-MBL editorials also appeared in the Wisconsin Corporate Report and the Huffington Post on Tuesday. (See related story: HuffPo, Wis. op eds: MBL bill to help small biz grow).