A day after President Obama said he would make job creation his next top priority, CUNA President/CEO Bill Cheney urged him to ask Congress to enact legislation that would raise the cap on member business loans to as much as 27.5% of assets.

“As the economy continues to recover from the financial crisis, Americans need credit unions now more than ever,” Cheney wrote.

When Obama signed legislation Tuesday to increase the debt ceiling and reduce federal spending he promised to redouble efforts to create more jobs.

Cheney wrote that the legislation “would allow credit unions to lend up to $13 billion to small businesses in the first year without an outlay of a single taxpayer dollar.''

Sen. Mark Udall (D-Col.) and Rep. Ed Royce (R-Calif.) have both introduced legislation that would allow eligible credit unions to increase their small business lending to 27.5% of total assets, at a rate of growth not to exceed 30% a year.

Credit unions must be well-capitalized, be at or above 80% of the current cap, have five or more years of member business lending experience and be able to demonstrate sound underwriting and servicing.  If a credit union's net worth ratio falls below the well-capitalized requirement (currently 7%), it would have to stop making new business loans.

The Senate Banking Committee held a hearing on the measure last month, at which NCUA Chairman Debbie Matz endorsed the measure and said the agency is capable of enacting adequate regulatory safeguards to minimize the risks to the NCUSIF.