Business Lending Needed from California Credit Unions, League Says

SACRAMENTO, Calif. – California's credit unions, like many in other states, see an unfilled need with business lending. This was the sentiment expressed by Mark Lowe, spokesman for the California Credit Union League in a recent Sacramento Business Journal article. According to the CCUL, of the 575 credit unions in the state, nearly 105 of them have originated a business loan to a member. At least 50 have helped to fund a business loan but was not the originator. Another 22 credit unions are now SBA lenders. Even still, business lending is still relatively new for the Golden State, Lowe told the publication. "Very few of them are even getting their feet wet yet," Lowe said. Still, "credit unions have been doing business lending since day one in 1909."The only thing that has changed is the size and sophistication of the loans." For community bankers frustrated over credit unions' entry into business lending, Lowe told the publication "the ironic thing is that bankers are complaining about this business, but this tends to be the business the bankers don't touch." Business loans average about $120,000, with most under $50,000 the publication reported. "This is business that is not being served. Or if the banks do it, they do it with a credit card," Lowe said. "I don't see what the bankers have to complain about. We're picking up the slack here." In the article, California Bankers Associations Spokeswoman Anissa Yates said "(its) members are concerned about credit unions becoming more banklike." "We know that credit unions have a place in the market, serving customers they were created to serve. But there seems to be an overwhelming desire by the medium and larger credit unions to match any banking product," Yates said. "If they are going to do everything that a bank does, we don't think they should be able to keep their tax-exempt status."