MBL CUSOs Not Fatigued by Cap Fight
As credit unions continue the battle to get the member business lending cap increased, some CUSOs said they are in it for the long haul.
Business lending CUSO CU Business Group LLC peeled back the layers on NCUA data to show the MBL cap’s impact. According to analysis of NCUA 5300 statistics by the Portland, Ore.-based CUSO, there were 208 credit unions within 3% of the 12.25% cap as of Dec. 31, 2010. A total of 375 credit unions were halfway to the cap, with MBLs at 6% or more of assets.
CUBG President/CEO Larry Middleman said he knows of many other credit unions below 6% in MBLs that intentionally moderate their MBL growth for purposes of managing to the cap.
“With loan growth difficult to achieve today, credit unions are now more than ever looking for new avenues of growth and profitability,” Middleman said. “To be forced to slow, or even stop, business loan originations because of a regulatory cap is hurting not only the credit union industry, but most of all the small business members of these 375 credit unions.”
Another business lending CUSO, Commercial Alliance in Troy, Mich., is committed to seeing the MBL cap increase, said Terrence McHugh, CEO and president. The suburban Detroit CUSO recently marked a milestone when it surpassed servicing more than $150 million in loans.
“Credit unions are playing a critical role in helping fuel local businesses today, and increasing the MBL cap can help build a stronger economy,” McHugh said. “This is not an issue I see our industry walking away from,” he added on the MBL cap increase effort.
Middleman agreed, saying “with the challenges facing credit unions today, this is an opportunity that would help the industry and spur significant economic growth – and therefore the cap continues to be high on many credit unions’ radar.”