WASHINGTON (2/13/12)--Access to capital "is essential for the health of the small business economy," and the current 12.25% of assets member business lending cap that is imposed on credit unions "is detrimental to the health of small business," the Small Business Authority (SBA) said in a Forbes.com blog post.
Separate pieces of House and Senate legislation would increase this cap to 27.5% of total assets, injecting $13 billion in new funds into the economy, and creating as many as 140,000 new jobs, according to Credit Union National Association (CUNA) estimates.
"Credit unions have better loan loss performance statistics than other financial institutions and have 92 million members across the United States, many of which desire business loans," the blog said, noting that credit unions have been making MBLs since the early 1900s, and did so with no cap on their ability to lend. The business lending activities of credit unions, which "are historically experienced in this field and have the capacity to lend" should not be limited, the blog post added.
The SBA blog post also highlighted CUNA's Small Business Hike the Hill, which took place last week in Washington. Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) advocated for an MBL cap increase during a Wednesday Capitol Hill press conference, and small business and credit union representatives from across the country met with their respective legislators to further spread the pro-MBL cap increase message. All in all, 75 small business and credit union representatives from 15 states are conducting their own state and district level MBL cap increase advocacy activities.
SBA also took part in the Hike the Hill activities.
The SBA is a CUNA Strategic Services provider. For the Forbes.com blog post, use the resource link.
MBL cap increase legislation has also been supported in a Huffington Post piece by Heartland Institute Vice President Eli Lehrer and an American Consumer Institute blog in The Hill.
The Progressive Policy Institute has also suggested allowing increased credit union member business lending authority to ease the credit squeeze on small businesses. A recent Small Business Majority, Main Street Alliance and American Sustainable Business Council survey of small business owners has shown that the vast majority of small business owners believe it is difficult to secure a business loan.