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CUNA seeks presidential support of MBL cap lift
WASHINGTON (12/10/09)--In a Wednesday letter to President Barack Obama, Credit Union National Association (CUNA) President/CEO Dan Mica said that while “credit unions are working very hard to continue making loans, including business loans,” these efforts are being hampered by statutory restrictions on member business lending. This MBL ceiling, which currently stands at 12.25%, “limits credit unions business lending at the very time small businesses around the country are reaching out to credit unions for loans since often they cannot get credit from their bank,” Mica added. Legislation that would, among other things, increase the cap on credit union member business lending to 25% of a credit union's total assets, is currently in committee, and the bill’s sponsor, Rep. Paul Kanjorski (D-Pa.), is working with Reps. Nancy Pelosi (D-Calif.) and George Miller (D-Calif.) to include the MBL cap legislation in a developing jobs bill. CUNA has estimated that expanding the capacity of credit unions to make business loans could result in $10 billion in new business loans through credit unions and at least 108,000 new jobs in the first year after enactment, with no additional costs to taxpayers. President Obama will reportedly meet with bankers early next week to “cajole them into making more loans,” and Mica said that credit unions “would welcome the opportunity to be part of that meeting.” Unlike banks, Mica said that “credit unions do not need to be persuaded that lending to small businesses is the right thing to do, from a community service as well as an economic standpoint.” “Credit unions just need a greater opportunity to do more -- an effort that banking trade groups are trying to block, not based on substance,” but rather, “on pure politics.” In the letter, which was also sent to Treasury Secretary Tim Geithner, Assistant to the President and Chief of Staff Rahm Emanuel, Counselor to the Treasury Secretary Gene Sperling, and Treasury Assistant Secretary for Financial Institutions Michael Barr, Mica commended Obama for his recent speech which outlined job growth initiatives, adding that CUNA is “particularly supportive of efforts to reduce or eliminate fees as well as increase the guarantees associated with Small Business Administration loans.”
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