WASHINGTON — Credit unions could make more business loans andnot count it against their member business loan cap as a result ofa provision in the $825 billion stimulus package passed by theHouse last week.
The bill, which is now awaiting Senate action, would increase thepercentage of an SBA 7(a) loan that is guaranteed by thegovernment. Currently, the range is between 50% and 80%, but thatcould go up to a maximum of 95%. The SBA-guaranteed portion doesn'tcount against a credit union's member business loan cap.
The bill temporarily eliminates fees on these loans, whichlawmakers hope will increase the number of them, which are the mostcommon business loan. According to the Senate Committee on SmallBusiness and Entrepreneurship, during the last fiscal year 7(a)loans decreased by more than $1.6 billion, a reduction in thenumber of loans by more then 30,000.
Lobbyists for CUNA and NAFCU said the provisions would help creditunions do more to help jump-start the economy and assist thosecredit unions that are nearing the cap on member businessloans.
The trade groups have not been successful in persuading Congress toraise or eliminate the cap on MBLs.
The measure also includes provisions such as $100 billion forschool districts to make up for cuts in state funding, $87 billionto help states pay for certain health programs, and $39 billion forhealth insurance for the unemployed. It also includes a $500-perworker, $1,000-per-couple tax credit.
The bill was President Obama's first legislative test as president.Although most Democrats-who control both the House andSenate-support it, Obama was hoping for some bipartisan support. Hemet with House and Senate
Republicans, but in last week's House vote, no Republicans backedit. The measure passed the House in a 244 to 188 vote. All HouseRepublicans voted no, as did 12 Democrats.
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