WASHINGTON (7/2/12)--The Congressional Caucus on Access to Capital & Credit convened a briefing Friday that brought together representatives from both government and private lending--including the Credit Union National Association (CUNA) to represent credit unions--to discuss ideas of how to expand capital access to help boost the economy.
Bill Hampel, CUNA's chief economist, used the forum to highlight a need for an increased cap on credit union member business lending (MBL) to help small businesses with an ongoing credit crunch.
CUNA estimates that lifting the MBL cap to 27.5% of assets, from 12.25%, would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment. Both benefits come at no cost to taxpayers.
CUNA also has reported that in the four years since the recession began, credit union business loans outstanding rose by 45%, while small business loans at banks fell by 13.4% over the same period.
Hampel told the caucus audience that unless the MBL cap is increased, more than 500 credit unions may have to stop or slow their small business lending programs within the next few years.
"The point is," Hampel said, "these 500 credit unions--that incidentally hold about 75% of MBLS subject to the cap--are right now having to stop or slow their business lending solely because of this arbitrary cap.
"That is just plain wrong, particularly at a time when small businesses are crying out for more credit."
He noted there are bills in the U.S. House (H.R. 1418) and Senate (S. 2231) that would increase the cap to 27.5% of assets and noted it was a "no-brainer" way to increase capital for small businesses.
The capital and credit access caucus is co-chaired by Reps. David Schweikert (R-Ariz.) and Bobby L. Rush (D-Ill.). Also on the Friday program were representatives from: The U.S. Treasury Department's Community Development Financial Institutions Fund, the Security and Exchange Commission, the Small Business Administration, the American Bankers Association, the Independent Community Bankers Association, CrowdCheck, the National Venture Capital Association, and Opportunity Finance Network.