The Wisconsin Bankers Association's claim that credit unions are not doing enough to serve the underserved is a "shameful" attempt to deflect from business lending efforts, the Wisconsin Credit Union League said.
League President/CEO Brett Thompson was referring to an Aug. 25 WBA press release that read "Tax exempt credit unions should expand their outreach to underserved populations rather than asking Congress for additional advantages over their taxpaying competitors."
"What an irony that banks suggest credit unions do more to serve the financially underserved," Thompson said. "Isn't that just what credit unions are trying to do in making more business loans available to the small businesses that can't get loans from banks?"
Thompson said CUs tend to grant the kind of small loans that banks won't, which average around $174,772 to households with incomes below $50,000. According to the league, Wisconsin banks' business lending dropped by 19% from March 2009 to March of this year. Credit unions in the state increased their lending by 11% but many have maxed out what they can lend because their member business lending is capped at 12.25% of total assets. Legislation is pending on raising the cap to 27.5%.
"It might be funny if the future of many small businesses were not at stake, but we're talking about thousands of jobs that could disappear and otherwise sound enterprises that are being jeopardized because banks can't or won't lend to these small businesses," Thompson said.