He spoke of the importance of creating new jobs and promised to use money paid back under the Troubled Assets Relief Program to lend money to community banks. But when it came to raising or lifting the cap on member business loans for credit unions, President Obama said nothing in last night's State of the Union speech.
Lobbyists for CUNA and NAFCU are working to get a cap increase included in the jobs bill that is currently working its way through Congress. The measure passed by the House did not include such a provision so the focus is now on the Senate side.
Under the Obama proposal, community banks with assets of less then $1 billion would be able to borrow an amount equal to 5% of their assets while those with assets between $1 billion and $10 billion would be able to borrow up to 3%.
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CUNA President/CEO Dan Mica said Congress should include the provision because "there is clearly demand for small business loans, and credit unions are trying to meet that demand….There is no economic or safety and soundness rationale for the cap. While the number of credit unions very close to the cap may be small, at recent growth rates, many more credit unions find the cap binding."
NAFCU President/CEO Fred Becker said his group applauds "efforts to energize small business lending. Yet, we must insist that any effort to promote greater business lending through community banks must be combined with an effort to help credit unions, who are a vital part of Main Street and today provide financial services to 92 million members."
Both Mica and Becker noted that credit union business lending has increased by double digits since 2008.
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