MADISON, Wis. (5/18/09)--Wisconsin credit unions are working to fill the lending void, Wisconsin Credit Union League President/CEO Brett Thompson wrote in a letter to the editor that appeared in The Capital Times Wednesday.
The Capital Times is based in Madison, Wis. Thompson wrote in response to a letter written by a banking trade group in Wisconsin that suggested banks can't "immediately fill the entire void for loans and it is unfair for critics to suggest otherwise."
Credit unions can fill the lending void, Thompson argued, but are prevented from doing so because of a 12.25% member business lending cap.
"Nearly half of credit unions' member business loans go to households with incomes less than $50,000. Credit unions could do more, at no cost to taxpayers, but banks consistently oppose attempts to lift an arbitrary cap on business lending that only applies to credit unions," Thompson said.
The banking trade group's letter also noted that some healthy Wisconsin banks have accepted taxpayer-provided Troubled Asset Relief (TARP) Funds "to take advantage of below-market cost of capital, something that may not fit with every bank's growth plans, but it clearly does for some."
The Wisconsin league president argued that banks accepting TARP money may be doing so as a growth strategy to spur lending, instead of using the money as a bailout.
Last week, Wisconsin business people addressed a congressional oversight panel to express their frustration at the lack of credit available from banks. The panel said only 29% of small business owners can meet their borrowing needs, Thompson noted.
"We suggest that consumers and businesses look to their locally owned, democratically operated credit unions for the funds they need," Thompson added. "And we suggest it is 'unfair,' to use Kurt Bauer's word, for banks to block a ready source of increased funds for small businesses."
courtesy of cuna.org