Sen. Kay Hagan (D-N.C.) was in the Tar Heel state Jan. 12 hosting a jobs creation roundtable. Representatives from several North Carolina CUs participated, including Truliant Federal Credit Union, Local Government Federal Credit Union and the North Carolina Credit Union League. Local small business owners including a new restaurant and a home construction firm, among others, also shared their perspectives.
The impact of banks slashing their business lending has opened up a window of opportunity for North Carolina credit unions, Hagan said. Speaking to Credit Union Times shortly after the roundtable held in Winston-Salem, N.C., Hagan said with unemployment at 11% in North Carolina, "it's all about jobs, jobs, jobs."
"Twenty-two of the TARP banks have cut business lending to the tune of $10.5 billion over the last six months, Hagan said. "At the same time, in the last three months the SBA has increased small business to $3.8 billion."
Hagan has been supportive of efforts to boost CUs' ability to lend responsibly to small businesses and heard from attendees about what she can do in Washington to help. She has been in the industry's corner in helping to promote raising the member business lending cap from 12.25% of a CU's total assets to 25%. At the roundtable, Hagan said she learned even more on how the cooperatives can help businesses continue to operate in a down economy. The next step is to take the roundtable discussions back to Washington when Congress was scheduled to return to session Jan. 19.
"We want to see how the federal government can help unfreeze credit so that small businesses can have the opportunity to avail themselves to it," Hagan said.
NAFCU President/CEO Fred Becker praised Hagan's efforts to get the word out about raising the MBL cap.
"Small businesses are the engines that drive our economy. Credit unions, as member-owned, not-for-profit financial institutions, are keen to do more for small business owners, but this cap has created a huge obstacle," Becker said.
Currently, there is legislation in both the Senate and the House that would raise the MBL cap: S.2919, the Small Business Lending Enhancement Act of 2009, and H.R. 3380, the Promoting Lending to America's Small Business Act.
"Now more than ever, our nation needs this no-cost, win-win solution to stimulate economic growth and produce bottom-line impact for small businesses and credit unions," Becker said.
According to NAFCU, in the third quarter of 2009, CU assets increased 7.7% to more than $874 billion. Since Sept. 2008, credit union member business loans have increased nearly 17%. Through the third quarter of 2009, CUs provided more than 139,000 loans for a total of nearly $28 billion to their members.