Saying it's “time to think outside the box,” on job creation, the two House sponsors of legislation to raise the cap on member business loans wrote President Obama on Wednesday to urge him to include the proposal in the jobs package he plans to present Thursday night to Congress.
“During this difficult period in our economy, many small businesses require capital to stay afloat, remain competitive and ramp up hiring. By increasing the credit union cap we can help fill this void and stimulate job creation without spending additional tax dollars,” Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) wrote Obama.
Sen. Mark Udall (D-Colo.), who introduced a companion bill in the Senate, issued a statement urging Obama to include an MBL increase in his package of proposals.
"Small-business owners across Colorado have told me they need fewer regulations and more access to capital in order to expand and hire, and that's what my bill would do. We could create well over 100,000 jobs by next summer alone if we passed this into law today," Udall said.
The bill would allow eligible credit unions to increase their small business lending from 12.25% of assets 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 Royce-McCarthy bill has 62 cosponsors in the 435-member chamber. Udall’s bill has 20 cosponsors in the 100-member Senate. Obama is scheduled to give his speech on job creation to a joint session of Congress at 7 p.m. ET Thursday.
It comes at a time when his approval ratings are in the 40s, according to several national polls. And unemployment was 9.1% in August, according to data released by the Labor Department last Friday.