Citing polling data that showed more than 60% of small businessowners reported lack of available credit as a serious problem, CUNAPresident/CEO Bill Cheney wrote lawmakers that raising the cap onmember business loans would “help small businesses and the economyrecover.''

NAFCU President/CEO Fred Becker wrote that the current cap of12.25% “continues to hinder the ability of local lenders to helplift small businesses out of the worst financial crisis since theGreat Depression.''

The trade associations' leaders addressed their letters to thechairman and ranking Democrat on the House Small BusinessCommittee. The panel, which held a hearing Wednesday on smallbusiness job creation, doesn't have jurisdiction over thelegislation. However, Becker and Cheney urged lawmakers tocosponsor the measure, which would raise the cap on MBLs to as muchas 27.5% of assets.

Cheney cited a survey by a coalition of small business groupsthat showed that 64% of respondent believe that the lack ofavailable credit is a “serious or fairly serious problem.'' Inaddition, 61% of respondents said it is harder to get a smallbusiness loan than it was four years ago. Becker wrote that thebill is “a carefully crafted compromise tailored to address theconcerns that raising the current cap could somehow create safetyand soundness issues.'' The legislation, sponsored by Rep. Ed Royce(R-Calif.), would require that credit unions must bewell-capitalized, be at or above 80% of the current cap, have fiveor more years of member business lending experience and be able todemonstrate sound underwriting and servicing.

If a credit union's net worth ratio falls below thewell-capitalized requirement (currently 7%), it would have to stopmaking new business loans. It has 114 cosponsors in the House. Acompanion bill by Sen. Mark Udall (D-Colo.) has 22 cosponsors.There have been hearings on the measure in both the House Financial Services Committee and the Senate Banking Committee. At both sessions, NCUA ChairmanDebbie Matz endorsed the measure. There also has been some talkthat the bill could be combined with a bill that would provideregulatory and tax relief to banks and regulatory relief to credit unions.