Overnight, NACUSO sent a letter to several key senators outlining why a bill to increase the member business lending cap is critical for credit unions and job creation by small businesses.
“Without the ability for credit unions to grow their lending portfolio, the credit needs of many credit union business members will not be met,” wrote NACUSO President/CEO Jack Antonini in a Nov. 26 letter to Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), Senate Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Member Richard Shelby (R-Ala.).
“The ability of the credit unions to continue to pay for their business lending infrastructure either internally in their credit union or in a CUSO is put in jeopardy by an arbitrary lending cap,” Antonini said.
Under S.2231, the MBL cap would increase from 12.25% of assets to 27.5%.
In the letter, which was co-drafted by Tony Boutelle, CEO of CU Direct and chairman of NACUSO's Legislative & Regulatory Advocacy Committee, NACUSO pointed out to the senators that credit unions utilize CUSOs to help provide business loans, thus assisting with small business formation and significant job creation.
“Perhaps the country could afford to restrict credit to small businesses when this statutory cap was put in place in 1998 and small business credit was freely available,” Antonini said. “But we are now in different times. We see no reasonable justification for stifling any additional access to needed credit for small businesses when it is so sorely needed by those who invest in and own the types of small businesses that are creating the majority of American jobs today.”
While NACUSO said it believes “the full elimination of an aggregate business lending cap would be the preferable public policy decision, the relief afforded by S.2231 is long overdue and will serve to help America’s small businesses with another needed access to credit.”
“As NCUA Chairman Debbie Matz stated in her testimony a few months ago on similar legislation, there are credit unions at or approaching their aggregate lending cap while the demand for small business loans continues to increase,” Antonini said. “Without the ability for credit unions to grow their lending portfolio, the credit needs of many credit union business members will not be met.”