More small businesses are turning to credit unions to meet their financial needs, The Wall Street Journal recently discovered.In the March 3 article, several credit unions discussed the demand for small business loans. Among them were Coastal FCU in Raleigh, N.C., Shoreline CU in Two Rivers, Wis., Summit CU in Madison, Wis., West Texas CU in El Paso and Mountain America CU in West Jordan, Utah. CUNA Senior Economist Mike Schenk told the publication, "In this really bad environment, we're doing more and more loans."Some CU CEOs said they could do more business loans if the 12.25% member business lending cap was raised to 20%, an effort that continues to stall each year it comes before Congress. Kenneth Beine, Shoreline CU's president/CEO, told the Journal his credit union's business loans have grown from less than $1 million to $10 million since 2007 and anticipates it will bump up against the MBL cap by mid-year.Larry Wilson, president/CEO of Coastal FCU, said if the loan limit was not in place, the CU could make about $165 million more loans over the next 12 months. Wilson told the publication that it is about $5 million away from reaching its MBL cap.The article also spoke with several business owners who had been turned down by banks and were later approved for loans at CUs. Still, despite the demand, CUs are asking for more proof of income, said Curtis Anderson, vice president at Mountain America CU.To allow for a higher MBL cap, would allow credit unions to "venture into making larger commercial loans," an unfair advantage over their community banks competitors, said Keith Leggett, senior economist at the American Bankers Association.Schenk told the Journal that the federal cap discourages many credit unions from even offering business loans because "it's expensive to start up a business loan department.""The 12.25% placed on credit unions is an arbitrary cap that was imposed in 1998 as part of the Credit Union Membership Access Act," Schenk said, adding, because CUs are owned by their members "it is not about maximizing its profits, it's about maximizing service."–[email protected]