Credit union trade associations continue to work contacts onCapitol Hill in an effort to craft a small businesses package thatwould include S. 2231, the Small Business Lending Enhancement Act, whichwould raise the credit union member business lending cap from12.25% to 27.5% of assets.

The package, which would include items both credit unions andbanks said they need to better serve small businesses, would endlegislative gridlock among lawmakers who have said they don'twant to vote on the member business lending bill because it wouldalienate them from valuable credit union or bank supporters.

CUNA Senior Vice President for Legislative Affairs Ryan Donovansaid while credit unions have identified MBL as key to servingsmall businesses, banks are lobbying for an extension of the FDIC'sTransactional Account Guarantee program, which provides depositinsurance coverage for noninterest-bearing transactionaccounts.

The program is set to expire Dec. 31. According to the FDIC, TAGdeposits totaled $1.4 trillion as of last Dec. 31.

For credit unions, the NCUA provides similar deposit insurancecoverage for noninterest-bearing transaction accounts, separatefrom general share insurance coverage. It is also set to expire atthe end of this year.

Donovan said while the non-interest-bearing account coverage isappealing to credit unions, raising the MBL cap would be the “bestthing Congress could do for credit unions serving smallbusinesses.”

NAFCU President/CEO Fred Becker indicated his group is alsoinvolved in the package, as revealed in a letter to House FinancialServices Committee Chairman Spencer Bachus (R-Ala.) and RankingMember Barney Frank (D-Mass.).

Becker asked the committee leaders to provide parity for creditunions in the event the FDIC TAG coverage is extended. Donovan said CUNA would also seek parity on the issue.

Becker also raised the issue of parity between the FDIC'sprogram that provides full deposit insurance coverage for Intereston Lawyers Trust Accounts. Congress passed a change to theDodd-Frank law to clarify the FDIC's ability in this area, butunfortunately failed to provide parity to credit unions, Beckerwrote in the letter.

The NAFCU chief urged the committee to “carefully consider” apackage that would include coverage of transaction accounts,IOLTAs, and “language to lift the arbitrary credit union memberbusiness lending cap.”

“Combining these issues, along with other possible regulatoryrelief measures, would be one way for the Committee to helpour nation's community financial institutions, small businesses andconsumers,” Becker said.

Donovan also said IOLTA could be a part of the package thatincludes MBL and a TAG extension.