While credit union representatives each had their five minutes of fame at the House Financial Services and Small Business Committees’ hearing on business lending, that was about all the attention they received.
In his introductory remarks, Ronald Covey, president/CEO of St. Mary’s Bank testifying on behalf of CUNA, stated, “Our CU involvement in business lending dates back to the first days of the movement. It’s in our DNA.” He noted his credit union’s involvement in the Small Business Administration programs and state programs. Covey also highlighted that St. Mary’s average business loan is under $200,000, but his credit union is still nearing the cap and if all loans in the pipeline were to be approved it would push his credit union $5 million over its 12.25% of assets cap.
“Credit unions have fared very well in the economic environment and therefore have capital to lend,” Mid-Atlantic FCU President/CEO Rick Wieczorek said during his testimony on behalf of NAFCU. Both credit union executives made a push for the legislation to increase the cap to 25%, but that was really the only opportunity they had since no lawmakers asked credit unions about the legislation during the Q&A segment.
Wieczorek did drive home the point that “some,” referring to the banking lobby and Fed Chairman Ben Bernanke’s comments earlier this week, tied the business lending restrictions to the tax exemption, but the tax exemption has been in place for nearly 80 years, well before the cap was put in place in 1998.
NAFCU Director of Legislative Affairs Brad Thaler said that he was disappointed the credit union legislation did not get more attention, but he was glad that the point was made that credit unions are not looking to get capital but to be able to make more loans by simply removing the cap.
CUNA Senior Vice President John Magill said he took it as somewhat of a good sign that credit unions didn’t take a lot of the pointed questions that they often do, because people are understanding that there is no good policy argument against credit unions offering more business loans.