Removing Barriers Blog

Introduced: Access to Credit for Small Businesses Impacted by the COVID–19 Crisis Act of 2021
Posted March 02, 2021 by CUNA Advocacy

As the 2021 CUNA Governmental Affairs Conference begins this week, Representative Brad Sherman (D-CA) and Brian Fitzpatrick (R-PA) introduced legislation that would exempt all credit union member business loans made during a declared disaster from the member business lending cap for one year. CUNA and its League partners requested such an exemption in its engagement with Congress and the administration.  

“Thanks to Reps. Sherman and Fitzpatrick for their bipartisan introducing this to ensure that all available business credit is deployable during and after the pandemic so small businesses can get back to business and Main Street communities can recover quickly,” said CUNA President/CEO Jim Nussle. “We look forward to engaging further with Congress to advance this bipartisan legislation.”

A letter was sent to the bill's sponsors in support of this legislation.

As the COVID-19 pandemic persists, small businesses across the country will continue to need capital and credit unions are able to pump billions into the economy—at no cost to the government. However, an obstacle impedes credit unions from fully assisting these businesses: the arbitrary credit union Member Business Lending (MBL) cap which limits some credit union lending activity to 12.25% of assets.

Given the financial needs of so many small businesses, now is the time to provide credit unions with additional flexibility to serve their business members by lifting the cap. While credit union business lending has increased greatly since the Great Recession, many credit unions are now approaching the 12.25% of asset cap. We conservatively estimate that even temporarily removing the MBL cap will provide over $5.5 billion in capital to small and informal business ventures, creating nearly 50,000 jobs just over the course of the next year