WASHINGTON — Credit unions could do more to help small businesses attain much-needed capital if Congress let them lend more money, Hawthorne Credit Union President Carl Sorgatz told a House subcommittee Wednesday.
Sorgatz, whose credit union serves people who live or work in five counties in and around Chicago, said the current cap on loans–12.25% of their total assets–”has no basis in either actual credit union business lending or safety and soundness considerations.”
He urged passage of the Credit Union Regulatory Improvements Act (H.R. 5519), which includes a provision to raise the limit on business loans to 20%. It would also allow the National Credit Union Administration to increase the threshold for defining a member business loan from $50,000 to $100,000.
CURIA is a comprehensive measure that has raised strong objections from the banking lobby. Some of its provisions –though not the increase in lending limits–are in the Credit Union Regulatory Relief Act (H.R. 5519) which was supposed to be voted on earlier this week but was pulled from the calendar by the House leadership after a strong lobbying effort by the banking community.
Lobbyists for the credit union industry are scheduled to meet Friday with House Financial Services Committee Chairman Barney Frank (D-Mass.) to discuss the future of CURIA.
Sorgatz, who testified on behalf of CUNA, made his remarks during a hearing of the Subcommittee on Finance and Tax of the House Small Business Committee.