WASHINGTON — Rep. Brad Sherman (D-Calif.), a strong credit unionsupporter, promised Monday that he will fight to raisethe cap on member business loans and preserve the tax exemptionwhile at the same time facing his toughest re-electionchallenge.

Sherman, a senior member of the House Financial ServicesCommittee, told attendees at NAFCU's Congressional Caucus at the Mayflower Hotel that one of thekeys to jumpstarting the economy is to have government get out ofthe way and do things that will allow businesses to attain morecapital and hire more people.

One solution is getting Congress to raise the cap on memberbusiness loans from 12.25% of assets to 27.5% of assets andSherman noted that he is cosponsoring legislation that wouldaccomplish that.

“I am hoping that the legislation will come to the floor soon,''he said.

Sherman also said eliminating the credit union tax exemptionwould be a “sudden and unwise change,'' and he will do all he canto prevent that from happening. He isn't a member of theHouse-Senate committee on deficit reduction that could vote toeliminate the exemption as part of its overall efforts toreduce government spending.

Sherman has a tough re-election race coming up because thecommittee that redraw California's legislative lines placed him inthe same district as fellow Rep. Howard Berman (D-Calif.) the topDemocrat on the House Foreign Affairs Committee.

Sherman joined the House in 1997, Berman in 1983. Unless one ofthem retires, they will face off in next year's Democraticprimary.