Calling the request opportunistic, banking trade groups railed against the requests by credit union trade groups to increase the Member Business Loan cap in order to help members facing financial hardships from the coronavirus crisis.
“We write to urge Congress to reject opportunistic and unnecessary requests for credit union charter enhancements in the midst of a pandemic, including calls for expansion of the Member Business Loan cap,” the American Bankers Association and state banking associations wrote in a letter to congressional leaders Wednesday.
CUNA and NAFCU have said the MBL cap will hamper their efforts to assist members. And Rep. Brad Sherman (D-Calif.) has introduced legislation that would lift the cap for three years.
In addition, more than 60 House members have sent a letter to congressional leaders asking that credit unions be given more freedom to lend during the crisis.
The banking trade groups said the issue is unrelated to the coronavirus crisis, since loans made under the Small Business Administration’s Paycheck Protection Program are not subject to the MBL cap.
They also said recent regulatory and statutory changes make raising the cap unnecessary.
The banking trade groups said they are proud of the work banks and credit unions have done during the crisis and that both industries appreciate the important tole they all play in keeping liquidity flowing to communities.
“However, efforts to increase credit union powers in the name of a crisis, including increases to the Member Business Loan limit, are disappointing and distract from important policy priorities that are actually needed to support our small businesses,” they added.