University of Iowa Community Credit Union CEO Jeff Disterhoft extolled the virtues of credit union business lending during a town hall meeting with President Obama and urged him to support a hike in the cap on member business lending.
Disterhoft, whose credit union is based in Iowa City, made his remarks Tuesday during a forum at Northeast Iowa Community College in Peosta. Obama said he would take the suggestion back to Washington.
“I told him that we are near our cap and just on Monday I had to turn a credit-worthy electrical supply company down for a loan. I then talked about what raising the cap would do to create jobs and increase the flow of credit to many communities,’’ Disterhoft told Credit Union Times on Wednesday.
He said that Obama’s “non-verbal language indicated that he wasn’t aware of the issue. But Small Business Administration Administrator Karen Mills, who led the session, nodded and indicated that she was very familiar with it.”
Disterhoft said his credit union, which has assets of $1.4 billion, has done business lending for 20 years but has been more aggressive during the past decade.
During the meeting, Obama spoke to all 140 attendees and then they broke up into six groups. There were 15 people in Disterhoft’s group and only two group members spoke to Obama.
Although Iowa is the home of the first delegate-selection contest Disterhoft said this was the first time he had ever met a president or presidential candidate.
“I enjoyed the experience and the chance to make the case for credit unions,” he said.
Sen. Mark Udall (D-Col.) and Rep. Ed Royce (R-Calif.) have both introduced legislation that would allow eligible credit unions to increase their small business lending to 27.5% of total assets, at a rate of growth not to exceed 30% a year.
Credit unions must be well-capitalized, be at or above 80% of the current cap, have five or more years of member business lending experience and be able to demonstrate sound underwriting and servicing. If a credit union’s net worth ratio falls below the well-capitalized requirement (currently 7%), it would have to stop making new business loans.
The Senate Banking Committee held a hearing on the measure in June, at which NCUA Chairman Debbie Matz endorsed the measure and said the agency is capable of enacting adequate regulatory safeguards to minimize the risks to the NCUSIF.