WASHINGTON (2/26/09)--Following President Barack Obama's speech Tuesday night before the Joint Meeting of Congress, the Credit Union National Association (CUNA) asked the White House to consider credit unions as a key part of the solution to the credit crunch facing America's small businesses.
A letter sent to the president Wednesday said CUNA is "very pleased that your administration is moving swiftly and aggressively to restore confidence and re-start lending."
"We hope you support credit unions as part of the solution by calling on Congress to enact legislation that eliminates the credit union member business lending cap," wrote CUNA President/CEO Dan Mica.
Mica noted that the cap has been in place only 10 years and it was arbitrarily set in response to banking lobbyists who wanted to restrain credit unions. He noted that there is no economic or safety and soundness rationale for the 12.25%-of-assets cap.
Without that ceiling, Mica wrote, "We estimate that credit unions could lend up to $10 billion in new business loans during the first year after the credit union business lending cap was eliminated."
The average credit union business loan is under $200,000, which means that credit union business loans go to the small businesses that need them the most, Mica pointed out.
It is not about lending to build shopping centers or sports arenas; it is about helping businesses make payroll, stay in business, expand their businesses and stimulate the economy, the CUNA letter said.
"Encouraging competition by permitting credit unions to do more small business lending could go a long way to eliminate the credit crunch and restore confidence in the economy. It may even encourage America's community banks to lend more to small businesses," Mica suggested.
Use the resource link to read the complete CUNA letter.
courtesy of cuna.org