WASHINGTON (6/6/13)--Increasing the credit union member business lending (MBL) cap is "one very simple solution to assist small businesses in raising capital," Credit Union National Association President/CEO Bill Cheney wrote in a Wednesday letter to the U.S. Congress.
The letter was submitted for the record of a Thursday House Small Business investigations, oversight and regulations subcommittee hearing entitled "Financing America's Small Businesses: Innovative Ideas for Raising Capital."
Cheney in the letter said "credit unions understand that in order for the economy to fully recover, small businesses need access to credit, which will help their businesses grow. Credit unions have capital to lend, a history of prudent and safe small business lending, and a mission to help provide access to credit to their members--including their small business-owning members."
Congress could help credit unions unleash this capital, and help small businesses and the economy, by approving MBL cap increase legislation. U.S. House (H.R. 688) and Senate (S. 968) bills would increase the credit union MBL cap from 12.25% of assets to 27.5%. CUNA 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 and without increasing the size of government.
S. 968, which was introduced by Sen. Mark Udall (D-Colo.) earlier this month, currently has 15 co-sponsors. H.R. 688, introduced by Reps. Ed Royce (R-Calif.) and co-sponsor Carolyn McCarthy (D-N.Y.), has 100 co-sponsors.
More than 500 credit unions are at or quickly approaching the cap, accounting for approximately 60% of credit union business lending, Cheney noted. "If the cap is not increased, the ability of these credit unions to continue to be there for their small business-owning members will be jeopardized," he wrote.