WASHINGTON-With the health care legislation debate over, credit unions may get an opening for member business lending reform when the House of Representatives and Senate re-convene here later this month.
Just prior to the Senate going into recess in 2009 credit unions were successful in having a Senate bill introduced that, like the version in the House that debuted earlier, would lift the 12.25% of total assets lid on member business lending. Senate Bill 2109, the Small Business Lending Enhancement Act, would increase that cap to 25% and increase the minimum business loan subject to the cap from $50,000 to $250,000. Although basically similar, the House and Senate bills do have a number of different provisions.
But neither bill is likely to pass as a standalone bill, and credit unions are hanging their hat on what will be a hot-button issue in the 2010 elections across the country: jobs.
"Our goal right now is to be part of the Senate jobs bill in January," said CUNA's VP-Legislative Affairs, Ryan Donovan.
Since the House bill was first introduced, CUNA and NAFCU have been pitching it as a means of helping small and medium-size business create jobs.
"Since we have estimated that raising the CU MBL cap would create as many as 108,000 new jobs (and inject up to $10 billion into small business in the first year), our focus has been on adding the Senate MBL legislation to job creation legislation being developed in that body," CUNA Spokesperson Pat Keefe told Credit Union Journal. "However, a jobs bill is not our only target. Any other appropriate legislative vehicle that presents itself - in either the Senate or the House-will be considered for the MBL provisions contained in either the Senate and House bills."
"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.
