WASHINGTON — Credit unions got the present they were seeking as the holidays approach, with the introduction of Senate Bill 2919, which would expand credit union business lending.
The question now is what effect Christmas will have on its prospects, in addition to health care reform and other legislation on Congress' plate, and can the legislation become reality.
"The Christmas timing could work to our advantage in that it might mute or at least blunt a bit the immediate opposition from the banks," Ryan Donovan, VP-legislative affairs with CUNA, told Credit Union Journal.
The bill, called the Small Business Lending Enhancement Act of 2009, was introduced with bipartisan support from a half-dozen co-sponsors. Like similar legislation in the House, the bill would lift the business lending cap from 12.25% of the credit union's total assets to 25%, and increase the minimum business loan subject to the cap from $50,000 to $250,000. Although basically similar, the two bills do have a number of different provisions.
"Our goal right now is to be part of the Senate jobs bill in January," said Donovan, adding there is more interest in the Senate for the bill at present than has been seen in the House. But that could change, Donovan added, as Rep. Barney Frank, chair of the House Financial Services committee, had earlier indicated he wanted to see a bill in the Senate before pushing for passage of the House version.
CUNA and NAFCU, both of which support the legislation, have claimed it would enable up to an additional $10 billion in business loans to America's small business if enacted. NAFCU said that through the third quarter of 2009, credit unions provided over 139,000 loans for a total of nearly $28 billion to members.
"We believe it is significant now that legislation to lift the arbitrary 12.25% member business lending cap on credit unions has been introduced in both the House and the Senate," said NAFCU President Fred Becker. "We believe this sends a strong signal that Congress will recognize the great resource that credit unions represent to small business and to our nation's recovery overall."
NCUA Chairman Deborah Matz also issued a statement in support of the bill. "This legislation is a welcome demonstration of the growing Congressional interest in enhancing the ability of credit unions to help small businesspeople," said Matz.
