WASHINGTON (5/14/12)--Overall, America needs public policies that encourage competition, and Congress needs to "remove market entry barriers that suppress small business lending," American Consumer Institute (ACI) Center for Citizen Research President Steve Pociask said in a recent blog post on the group's website, theamericanconsumer.org.
Pociask in his post again supported pending Senate and House bills that would increase the credit union member business lending (MBL) cap to 27.5% of a credit union's assets, up from 12.25%, under certain conditions. The Credit Union National Association (CUNA) has estimated that this increased MBL authority would help to inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.
Senate leadership remains committed to a floor vote on the MBL legislation, but a voting date has still not been determined.
The ACI president noted that credit union loans to small businesses increased by 40% during the recession, while small business lending by banks fell by 20% over that same time period. Credit unions remain willing to lend to small businesses, but "their lending has been capped by an outdated law that suppresses small business access to capital and deters smaller credit unions from serving these businesses," he wrote.
Ending the market barrier imposed by the MBL cap "would increase competition and stimulate economic investment, and do so without increasing government spending," Pociask said.
For the full blog post, use the resource link.