Second Member Business Lending Action Alert Issued
01/28/2010 01:21 pm
For the second time this week, the LSCU is asking for comments from credit unions on member business lending. The first one is looking for comments specifically addressed to House Financial Services Committee Chairman Barney Frank. The new action alert for member business lending will have a broader reach to Senators and President Obama.
Credit unions have been making member business loans (MBLs) since the early 1900s. Throughout most of this period there were no limits on the volume of MBLs credit unions could hold. Statutory limits on credit union member business lending did not appear until the passage of the Credit Union Membership Access Act of 1998 which established a cap of 12.25 percent of a credit union's total assets. There was no economic rationale for this limit in 1998 and there is still no rationale now. Legislation, which would raise the cap to 25 percent, is pending in the House and Senate -
H.R., 3380, the Promoting Lending to America's Small Businesses Act and
S. 2919, The Small Businesses Lending Enhancement Act.
Small businesses are finding it difficult to obtain credit from other financial institutions in this current economic climate. Credit unions are seeking congressional action in order to lift the MBL cap. Congress has the opportunity to help small businesses and credit unions by lifting the cap. MBL reform could provide up to $10 billion to small businesses in the first year alone and create over 108,000 new jobs. The time is right for credit unions to urge the President, Congress and Treasury to lift the cap.
The LSCU is asking credit unions to send messages to President Obama, the Treasury and both Senators urging them to include S. 2919 or any provision that would lift the MBL cap in the “jobs bill.” A prewritten letter is available at the credit union Grassroots Action Center,
http://capwiz.com/cuna/home/, this program has the capacity to personalize and send an email or print and fax a letter. (The message will be directed to the appropriate Senators based on your address)
The LSCU is also asking that letters be emailed or faxed to league representatives. In Alabama email it to
Will McCarty, vice president, Legislative Affairs/General Counsel or fax him at 205.991.2576. In Florida, email
Mark Landreth, vice president, Legislative Affairs, or fax him a copy at 850.558.1013 (cover sheet is not necessary).