WASHINGTON (3/14/13)--A TD Securities report shows that limited access to capital is slowing the overall economic recovery, and this report underscores a longtime credit union argument: that the U.S. Congress must act to remove the low, arbitrary 12.25%-of-assets cap on credit union member business loans.
In a release cited on businessinsider.com, TD Securites said overall credit conditions have been on the mend, but also noted access to credit has been limited for some small business owners.
The proportion of businesses ready to increase their capital spending has held steady at around 20%, below the pre-recession average of 30%, TD Securities reported. This shows credit access has impacted hiring and capital spending decisions, TD Securities noted.
According to U.S. Small Business Administration statistics, small businesses represent 99.7% of all employer firms, employ half of all private sector employees, and pay 44% of total U.S. private payroll.
Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) in mid-February introduced MBL legislation, H.R. 688, which would increase the credit union MBL cap to 27.5% of assets, from the current 12.25%-of-assets level. The bill, if enacted, would help credit unions lend an additional $14.5 billion to small businesses in just the first year after enactment. This money, which would be made available at no expense to taxpayers, would in turn help small businesses create around 158,000 new jobs.
The Credit Union National Association continues to strongly support the MBL bill, which has 63 cosponsors.