WASHINGTON (5/20/13)--The Small Business Lending Enhancement Act (S. 968) would "expand access to affordable credit for small businesses and help strengthen local marketplaces that serve consumers well," the Consumer Federation of America (CFA) said in a letter to Sen. Mark Udall (D-Colo.).
S. 968, which was introduced by Udall on Thursday, would increase the credit union member business lending (MBL) cap from 12.25% of assets to 27.5%. The Credit Union National Association has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.
CFA Executive Director Stephen Brobeck in the letter said increasing the MBL cap "would be particularly beneficial at this time," and would aid small businesses that "play an essential role in enhancing competition and innovation in local markets."
The CFA letter cited U.S. Department of the Treasury statistics that show 25% of credit union small business loans made in 2001 went to households with less than $30,000 in annual income. Another 20% of those loans went to families with incomes of $30,000 to $50,000, according to the Treasury statistics.
"If given greater small business lending opportunities, they will be able to invest in loans that likely will increase credit union earnings, capital contributions, and overall safety and soundness, directly benefitting all credit union members," Brobeck said.
Udall's bill currently has 14 co-sponsors. Reps. Ed Royce (R-Calif.) and co-sponsor Carolyn McCarthy (D-N.Y.) released similar legislation early this year. That bill, H.R. 688, has 94 co-sponsors.