The bill, which is now awaiting Senate action, would increase the percentage of an SBA 7(a) loan that is guaranteed by the government. Currently, the range is between 50% and 80%, but that could go up to a maximum of 95%. The SBA-guaranteed portion doesn't count against a credit union's member business loan cap.
The bill temporarily eliminates fees on these loans, which lawmakers hope will increase the number of them, which are the most common business loan. According to the Senate Committee on Small Business and Entrepreneurship, during the last fiscal year 7(a) loans decreased by more than $1.6 billion, a reduction in the number of loans by more then 30,000.
Lobbyists for CUNA and NAFCU said the provisions would help credit unions do more to help jump-start the economy and assist those credit unions that are nearing the cap on member business loans.
The trade groups have not been successful in persuading Congress to raise or eliminate the cap on MBLs.
The measure also includes provisions such as $100 billion for school districts to make up for cuts in state funding, $87 billion to help states pay for certain health programs, and $39 billion for health insurance for the unemployed. It also includes a $500-per worker, $1,000-per-couple tax credit.
The bill was President Obama's first legislative test as president. Although most Democrats-who control both the House and Senate-support it, Obama was hoping for some bipartisan support. He met with House and Senate
Republicans, but in last week's House vote, no Republicans backed it. The measure passed the House in a 244 to 188 vote. All House Republicans voted no, as did 12 Democrats.