WASHINGTON-CUNA President and CEO Dan Mica wrote a letter to the editor published in the April 25th edition of the American Banker countering a banker's accusation in an earlier letter that NCUA's proposed member business lending rule would take business loans from small banks. "The average credit union member business loan is only $118,000. If, as he says, Mr. [Harley] Bergmeyer's bank [Saline State Bank, Wilber, Neb.] is willing to make loans of that size, he should be applauded," Mica wrote. Bergmeyer, chairman of the American Bankers Association's Credit Union Advisory Group, wrote the April 11th letter entitled "NCUA Plan Would Take Loans Away from Small Banks," which asserted, "The $1,000 business loan is a staple of community bankers across America." The banker's letter countered comments from NCUA Board Member Deborah Matz in an April 2nd Banker article, "NCUA Re-Ups Push for CUs to Do More Biz Lending." Mica also noted that Matz has emphasized that many banks would not make such small loans or steer small business owners to higher interest rate credit cards. He cited a recent survey (Greenwich & Associates, "Market Pulse," January 2003) in which nearly 20% of small businesses rated their primary bank's ability to meet their credit needs as below average or poor. "America's small businesses drive our economy, and they need capital. It's unfortunate-but not at all surprising-that Mr. Bergmeyer and the ABA's reflexive response is to penalize credit unions for stepping forward to provide affordable credit to small-business owners, particularly those just starting out," he wrote. "There's room for credit unions and banks in this market, and small-business borrowers benefit by having the choice." Mica pointed out that credit union business loans account for just 0.5% of the total market in the United States. -

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