MBL Opponents Within Industry Speak Up: Print Preview
Members of the so-called “silent majority” of credit unions that oppose S. 2231, the bill that would increase the member business lending cap for credit unions, spoke out as banking lobbyists pressed the issue to lawmakers.
The Independent Community Bankers of America and the American Bankers Association fired off a joint letter July 17 to all U.S. senators telling them a silent majority of credit unions oppose the Small Business Lending Enhancement Act, which would raise the credit union member business lending cap from 12.25% to 27.5% of assets.
“When we compare the average HealthScore for credit unions engaged in member business lending versus the entire industry, we see that MBL credit unions have, on average, a healthier operating environment,” Glatt said. “That isn't to say that all CUs engaged in MBLs are healthy. Obviously, some are not. But there is certainly a noticeable performance difference between those CUs that offer MBLs versus the average credit union.”
Based on first-quarter Call Report data, credit unions that offer MBL earned a HealthScore just shy of 3, while those that don’t scored a 2.5, on a scale of 0 to 5, Glatt said. MBL credit unions scored significantly higher in four categories: loans, deposits, earnings and loan to share ratio. Scores for efficiency, delinquencies, charge offs, asset growth and member growth gave a slight edge to MBL credit unions. Operating expense scored evenly between the two, and net worth showed credit unions that don’t offer MBL having a slightly higher rating.