WASHINGTON (2/9/12)--Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.), chief sponsors of a House bill to increase the credit union member business lending (MBL) cap, stood with small business owners and credit union representatives Wednesday to conduct a press conference to spotlight small businesses' unmet need for capital--to grow and increase hiring capacity.
Royce said of the small business owners who came to Capitol Hill to support an increased MBL cap, "They are trying to put democracy in action." Royce said the business owners are asking for Congress' help with their capital needs, and said an increase in the MBL cap is a way Congress can help without having to increase the government's borrowing.
He cited the experience with the $30 billion Small Business Lending Fund, intended to encourage banks to lend more to small businesses. More than half the recipients of the taxpayer-funded SBLF money used it to repay their TARP borrowings, he noted.
"The point is there is a better way to go to help small businesses access capital…and that is the Small Business Lending Act," Royce said referring to his MBL bill. That bill would increase the MBL cap to 27.5% of a credit union's total assets, up from the current 12.25% cap.
McCarthy, addressing the business owners and credit union representatives in the room, encouraged them to continue to meet with their federal lawmakers in Washington and at home to advocate for increased MBLs.
"With this Congress, if there are not enough voices, no one is going to do anything about it," McCarthy said, adding, "We can't do it alone. We introduced (the bill). You have to fight for it. It's the people back home--all of you--that have to do the heavy lifting."
CUNA President/CEO Cheney (third from left) welcomes some of the small business representatives that gathered Tuesday and Wednesday in Washington, D.C. to urge federal lawmakers to support legislation that would increase the MBL cap. The small businesses represented the gamut of entrepreneurial opportunities--from a pet kennel owner to a construction contractor to an interior contractor to fitness business owners and more. (CUNA photo)
Credit Union National Association (CUNA) President/CEO Bill Cheney, addressing the gathering, underscored that credit unions have small businesses all across the country supporting credit unions in their attempt to provide more credit through increase small business lending authority.
He noted that bankers are the only group to oppose credit union efforts to provide more credit to the nation's small businesses.
"This is not a bank versus credit union issue. This is straight forward," Cheney said and underscored an MBL increase would infuse $13 billion in new credit, and create 140,000 new jobs--all at no cost to taxpayers.
Also at the press conference were small business owners, representatives from small business trade groups and business think-tanks, and credit union representatives--all joining this week to show the link between small business' needs for credit and credit unions' desire to help fill that need.
Credit union and small business representatives from Alabama, California, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Tennessee, and Texas met with their congressional representatives following the press conference.
Brothers Michael and Trevor Tucci, who co-own St. John's, N.Y.-based Energy Fitness, told Rep. Peter King (R-N.Y.) that Long Island, N.Y.'s Bethpage FCU was there for them when they were working to open their first gym, and they want to be able to continue to work with the credit union as they continue to expand their small business.
New York Credit Union Association (NYCUA) President/CEO William Mellin said Energy Fitness is a great example of the many small businesses that are "busting at the seams and looking to expand," and said increasing the MBL cap would allow credit unions to help these businesses grow.
In a later meeting with Rep. Nan Hayworth (R-N.Y.), Samuella Seisay, lending director with Actors FCU, New York, N.Y., said the MBL cap is forcing her credit union to turn away eligible borrowers. NYCUA Senior Vice President/General Counsel Michael Lanotte added the MBL debate should be about how best to help small businesses.
This sentiment was mirrored in a Missouri Credit Union Association meeting with members of Rep. William Lacy Clay's (D-Mo.) staff. Gary Hinrichs, CEO of O'Fallon, Mo.-based West Community CU said an MBL cap increase is not about banks versus credit unions… "it's about constituents." One such constituent, Becker Contracting Co. President Robert Becker, said he turned to West Community CU after his small bank decided to abruptly end their lending relationship, and added that he has been helped immensely by the credit union's much lower business loan rate.
Another credit union, Winston Salem, N.C.'s Truliant FCU, helped Permatech, Inc. CEO Joe Trettel expand his manufacturing business by taking on a new project in Saudi Arabia. Trettel told Rep. Brad Miller (D-N.C.) that the credit union loan allowed him to sustain his employee base, and, eventually, to grow the total number of employees at his business back to pre-recession levels.
Other small businesses and credit union representatives will conduct their own state and district level advocacy activities, with a total of 75 small business and credit union representatives from 15 states speaking up for an MBL cap lift.
The House (H.R. 1418) and Senate (S. 509) MBL bills have broad bi-partisan support. The House bill has 117 cosponsors and the Senate bill has 22 co-sponsors.