WASHINGTON (2/2/12)--Credit unions stood with their small business-owning members during the recent financial crisis, continuing to lend when others pulled back, and now approximately 525 are approaching the 12.25%-of-assets member business lending cap (MBL), the Credit Union National Association (CUNA) said in a letter sent to the top members of the House Small Business Committee Wednesday.
The letter to Chairman Sam Graves (R-Mo.) and ranking member Nydia Velazquez (D-N.Y. ) was sent in conjunction with the committee's hearing entitled, "The Path to Job Creation: The State of American Small Businesses." In it, CUNA President/CEO Bill Cheney urged the U.S. Congress to enact pending legislation that would raise the MBL cap to 27.5% of total assets.
"The need for Congress to enact this legislation is clear," Cheney stated. He said a recent survey by the Small Business Majority, Main Street Alliance and the American Sustainable Business Council showed that 64% of small business owners say that the availability of credit is a serious or fairly serious problem (News Now Jan. 27).
"Sixty-one percent say that it is harder today to get a small business loan than it was four years ago. Ninety percent support making it easier for community banks and credit unions to lend to small businesses," Cheney noted.
In fact, the Cheney letter went on to say, the only groups that oppose credit union business lending represent the banks that have pulled back access to credit when small businesses needed it the most, and have taken taxpayer money intended for small business lending and repaid their TARP obligations.
From December 2007 until September 2011, credit union business loan portfolios increased over 42% while bank small business loans decreased by over 14%, according to call report data from the Federal Deposit Insurance Corp. and the National Credit Union Administration.
"Meeting the credit needs of entrepreneurial members is part of credit unions' DNA," Cheney told the lawmakers. He reiterated that current legislation to increase the MBL cap would permit credit unions to lend an additional $13 billion to small businesses in the first year after enactment and help them to create 140,000 new jobs.
That boost to small business and the U.S. economy, Cheney reminded, would come at no cost to taxpayers.