Removing Barriers Blog

Letter sent to House Small Business Committee in support of PPP & lifting MBL cap
Posted March 10, 2021 by CUNA Advocacy

We wrote to the the House Small Business Committee prior to their hearing entitled, “The Next Steps for the Paycheck Protection Program.”  The letter wrote in support of additional PPP funding and of H.R. 1471, legislation that would lift the MBL cap for the duration of the COVID-19 pandemic for one year following its declared end.

Credit unions were proud participants in the SBA's Paycheck Protection Program (PPP). In fact, some credit unions were so eager to help their members through this program that they participated even though they had no previous relationship with the SBA. However, the quick implementation and slow bureaucracy at the SBA lead to significant and well documented problems for even the most experienced SBA lenders. 

Looking forward, beyond PPP, small businesses across the country will continue to be in need of funds and credit unions are in a position to pump billions of capital into the economy. There’s only one obstacle: an arbitrary credit union Member Business Lending (MBL) cap which currently limits credit union lending activity to 12.25% of assets. Even temporarily lifting the cap will result in more credit union business lending. While credit union business lending has increased greatly since the Great Recession, many credit unions are now approaching the 12.25% of assets cap. Representatives Sherman and Fitzpatrick recently introduced legislation (H.R. 1471) that would lift the cap for the duration the COVID-19 pandemic and for one year following its declared end.