CUs outraged over biz lending snub by administration

WASHINGTON (2/3/10)--Credit unions are outraged, baffled and feeling "snubbed" by the Obama administration's proposal to funnel $30 billion into smaller banks for business lending--but do nothing for credit unions, Credit Union National Association President/CEO Dan Mica said Tuesday.

President Obama at a town hall meeting in Nashua, N.H., Tuesday announced a proposal to channel billions to community banks to support small business lending. Specifically, the president's initiative would create a $30 billion Small Business Lending Fund using unspent Troubled Asset Relief Program (TARP) money that would be available as capital investments for community banks as an incentive to increase their small business lending. The proposal is subject to review and legislation by Congress.

However, as Mica pointed out, the proposal is entirely focused on small and community banks, and includes nothing for credit unions, ignoring the potential contribution that credit unions could make toward national economic recovery.

"Credit unions tell me that they are not asking for a taxpayer bailout; they did not receive TARP money and did not want it anyway. Yet now, the administration wants to give taxpayer money to banks through TARP to convince them to make more loans--the same banks that have been refusing to make loans over the last year when it was needed most by an economy starved of capital," Mica said.

"Credit unions have been making loans over the past year and can make even more if legislation expanding their capacity to make small business loans is enacted. I hear credit unions say: 'Don't just subsidize the banks; let us help this country get back on its feet--without using taxpayers' money,'" he added.

Mica said he is sure that the White House, and Congress, will soon start hearing from credit unions about their disappointment.

"Credit unions across the nation say they deserve to be treated with respect and should be part of the administration's solution. I know they will be contacting the White House and the Congress to deliver that message," Mica said. "In the meantime: I am respectfully requesting a meeting with the president about this entire issue--and seek the administration's support for more business lending capacity for credit unions."

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