WASHINGTON (6/12/12)--As a deepening economic crisis in Europe threatens the fragile economic recovery in the U.S., the Credit Union National Association (CUNA) urges lawmakers to move forward to enact a bill that would enable credit unions to do even more to support the U.S. economy by providing more credit to small businesses.
President Barack Obama "has encouraged Congress to enact a jobs plan to help small businesses weather this impending (European) threat, and we believe credit unions are in a position to help," CUNA President/CEO Bill Cheney says in a letter that will be sent today to U.S. Senate and House majority and minority leaders.
"Credit unions are not nearly as exposed to the issues in Europe as banks, especially larger banks. As a result, credit unions are better positioned to lend to small businesses," Cheney writes.
The Credit Union Small Business Jobs Act (S. 2231) would increase credit unions' ability to support small businesses by increasing the cap on member business lending for healthy credit unions with significant business lending experience to 27.5% of assets, up from the current 12.25%.
"During the most recent financial crisis, credit unions increased business lending while banks scaled back lending and, in some cases, withdrew from the market," the CUNA letter notes.
It highlights CUNA's observation that if the MBL legislation became law, credit unions could make $13 billion in additional credit available to America's small businesses in the first year. It would help to create 140,000 new jobs in that timeframe. And those economic improvements would come at no cost to the American taxpayer.
Noting bank groups' opposition to the MBL bill, Cheney also highlights hypocrisy in their arguments. For instance, he says, bank groups argue that the MBL would severely harm their member banks; but on the other hand they argue the bill is not needed because it would affect only a small number of credit unions.
"The American economy has not yet fully recovered from the last bank-caused crisis, and storm clouds are forming on the horizon as the crisis in Europe deepens," Cheney writes, and warns that without an increase in the MBL cap credit unions will not be able to help in the same way during the next crisis. CUNA estimates there are about 500 whose lending activity is already affected by the current low cap.
"It's time to say 'no' to those who don't want choice and 'yes' to small businesses" by enacting S. 2231, Cheney concludes the letter. The CUNA letter is being sent to Senate Majority Leader Harry Reid of Nevada and Senate Minority Leader Mitch McConnell of Kentucky, as well as House Majority Leader John Boehner of Ohio and House Minority Leader Nancy Pelosi of California.
Senate leadership has said there will be a vote this year on the MBL legislation.