WASHINGTON (3/20/09)—For the record of a congressional hearing titled “Perspectives from Main Street on Small Business Lending,” the Credit Union National Association (CUNA) urged lawmakers to consider credit unions as a key part of the solution to the credit crunch. Submitting a statement for the hearing record, CUNA President/CEO Dan Mica told key U.S. senators that although credit unions are being hit by a financial crisis they did not cause, they continue to provide credit to lend “and have the capacity to do more.” The letter went to Sens. Mary Landrieu (D-La.), chairman, and Olympia Snowe of Maine, ranking member, of the House Small Business subcommittee on entrepreneurship, which conducted the hearing. Mica pointed out in the letter that last year as the country’s residential mortgage credit markets came to a virtual standstill, credit unions actually increased their lending. “We hope you will consider credit unions as a key part of the solution to the credit crunch facing America’s small businesses,” Mica wrote. He added, however, that credit unions are legally and unnecessarily restricted from similarly alleviating the credit crunch that grips America’s small businesses by an arbitrary statutory cap on member business lending of 12.25% of a credit union’s total assets. “Banking lobbyists convinced Congress to enact this cap in order to restrain credit unions,” the CUNA leader said. “However, there is no economic or safety and soundness rationale for this cap.” Mica underscored that credit unions have lower net charge-off rates for loans than banks, and the difference is significantly lower for small business loans. The CUNA letter thanked both senators for their co-sponsored legislation in the 110th Congress that would have provided credit unions relief from the business lending cap by increasing the cap from 12.25% of total assets to 20%. Mica asked the senators to join their colleague, Sen. Charles Schumer (D-N.Y.), in his efforts to create legislation to eliminate the cap. Use the resource link below to read CUNA’s entire statement.