While some credit unions have experienced losses, it's still may be worth it for them to take a chance on what would happen if the 12.25% of assets member business lending cap was lifted.
Mark Cummins, president/CEO of the Minnesota Credit Union Network, expressed that sentiment in a March 25 letter published in Finance and Commerce.
"As credit unions begin to approach their business lending limit, they will be forced by statute to lend less. That's not what our country needs right now," Cummins wrote. "Credit unions have been making small business loans since they were formed in the U.S. 100 years ago. And in the first 90 years of existence, there was no business lending cap at all. Now is the time to raise the limits-a measure that would not cost taxpayers a dime or increase the size of government."
Cummins said Minnesota CUs "are being overwhelmed with requests from small businesses." Member business lending in the state has increased by 0.4% over the past year, and while that might not seem like a huge jump, "any gain is impressive in today's economy." Still, Minnesota CU business lending is up 47% over the past four years, he added.
Cummins acknowledged that CUs have experienced losses and "extending credit carries with some big risk, especially in a struggling economy."
"But it is our responsibility to overcome these risks and expand lending-and the credit unions of our state are willing to gamble on Minnesota," Cummins wrote.