<p>WASHINGTON-CUNA’s Small Business/SEG Services Committee members learned several ways in which credit unions can participate in Small Business Administration (SBA)-backed loan programs. The committee hosted a summit between several federal regulators and lawmakers to discuss ways of expanding credit union member business lending. “Any time you can have the key players in various agency’s around the table [on an issue] with as much economic impact as extending credit to small business entities, then it is a successful meeting,” NCUA Chairman Dennis Dollar said in an interview. He complimented the “impressive” array of agency officials. While the press conference following the meeting was sparsely attended, CUNA committee members touted the small business summit, aimed at gathering and disseminating information useful to increasing credit union member business lending within the current laws, as a great success. Congressman Donald Manzullo (R-Ill.), chairman of the House Small Business Committee, set the tone for the meeting, according to CUNA Small Business Committee Chairman Gene Poitras, president and CEO of the Oregon Credit Union Association. Manzullo said credit unions could fill an important void in business lending, according to Poitras. Manzullo and Congressman Paul Kanjorski (D-Pa.), who attended most of the morning meeting that spilled into the afternoon, were not available for the press conference. Manzullo recognized the need to expand lending to small businesses. “I’m hearing more and more banks are getting out of the small business lending business to focus on more profitable sources of income: consumer credit and home mortgage lending,” his prepared remarks for the meeting read. CUNA committee member and President and CEO of Community Credit Union Gary Base called Kanjorski’s leadership on the issue “inspirational.” Base observed that Kanjorski had obviously done his homework and was very interested in the subject. Neither congressman suggested changes to the credit union lending laws, but they appeared to be receptive, committee members said. “What we were looking at was the need for business loans in the country and there is a great vacuum,” Kanjorski told Credit Union Times. He complimented Dollar’s remarks, stating, “Chairman Dollar made a good point: Government should be a facilitator. It shouldn’t be a blocker or one to do things for you.” Kanjorski pointed out that no one is trying to take existing business from other financial institutions, but to simply widen the playing field. He suggested that community bankers work with the credit unions on this issue because he had heard similar complaints from them. He and Manzullo agreed the best and quickest solutions would be through the regulators. “Congressman Kanjorski recognized that we’d be a really good market niche,” Telesis Community Credit Union President and CEO Grace Mayo said, adding that he said credit unions would really have to coordinate to get things done in this area. CUNA Senior Vice President of Governmental Affairs John McKechnie said that CUNA would be coordinating with its member credit unions, but not with other trade associations that are also pursuing the issue. He pointed out that NAFCU and NASCUS members are already on their Small Business Committee. The meeting was not only to discover options for credit union member business lending but also to let others know credit unions are out there and willing, McKechnie said. “The plan is to make sure we take this start we made today and build upon it,” he said. CUNA’s Small Business Committee is now charged with compiling a list and researching all the suggestions given during the meeting by the different agencies, which could take up to a few months. Meanwhile, the committee was short on details to offer during the subsequent press conference. One thing SBA Office of Financial Assistance Assistant Director Jane Butler clarified for credit unions is that by adopting a low-income area, credit unions become eligible for SBA-backed loans since they would then be serving a geographically defined area. Additionally, three agencies, Department of Housing and Urban Development, the Department of Energy, and the Minority Business Development Agency of the Commerce Department remarked that they did not even think of credit unions as a business lending options. Additionally, SBA lawyers will be meeting shortly with NCUA lawyers to discuss the issue of expanding SBA-backed lending through credit unions. “We have had ongoing discussions between our general counsel’s office and their general counsel office in hopes of making all credit unions eligible to participate in SBA programs,” Dollar said. “I feel like SBA really reached out to us,” Base commented, adding that SBA planned to “look to credit unions as a key option.” What does the Department of Energy have to do with business lending? Plenty, the committee reported. While Energy is not a business lender, according to CUNA SVP of communications Mark Wolff, under the agency’s “Rebuild America” program, it can provide what it calls “cautionary” funds matching loans to small businesses dollar-for-dollar. Wolff emphasized while this is not directly giving credit unions more flexibility, they can point small business members to an additional resource, acting as more of a full service provider. One potential snag to credit unions expanding into business lending could be the attitudes of some lawmakers, according to McKechnie. “A lot of people in Congress feel credit unions need to stay in a very narrow box,” he said, specifically because of their tax-exempt status. Some also think its new territory for credit unions, when, in fact, many credit unions have helped start-up business through simple signature loans. Mayo emphasized that it is important for credit unions to be able to branch out. “You have to grow with your membership or they’re going to go with someone else,” she said. Just 15% of federal credit unions have $5.3 billion out in business loans, according to the committee, a number that has not grown much over the past few years. One other possibility discussed by the groups of credit union and government representatives was indexing the $50,000 floor on counting loans toward the 12.25% member business lending cap to inflation, CUNA Small Business Committee Member Bob Hoefer, president and CEO of Dupaco Community Credit Union, said. One thing everyone agreed on was that business loan demand is strong, particularly now that banks are cutting back on certain loans and raising fees. Also attending the meeting were other CUNA Small Business Committee Members, CUNA President and CEO Dan Mica and other CUNA senior staffers, all three NCUA Board members, and representatives from the Commerce, Housing and Urban Development, Treasury, and Agriculture Departments. No small business owners were invited, though Wolff explained that the congressmen had heard from their constituents. [email protected]</p>

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