Credit unions’ small business lending efforts received recognition in three separate features in prominent Washington,D.C. media, including National Public Radio (NPR); theWashington Post’s weekly business journal, Capital Business; and WTOP. They told how the financial crisis has made it harder to acquire a small business loan and how credit unions are helping but could do more if their member business lending (MBL) cap were raised.
Credit Union National Association (CUNA) President/CEO Bill Cheney discussed credit unions’ efforts to help small businesses by urging Congress to lift their MBL cap to 27.5% from 12.25% in a segment, “Tough Times Financing Small Businesses,” on NPR’s “Kojo Nnamdi Show.”
“Credit unions have actually expanded their business lending,” Cheney said. “From the beginning of the financial crisis to the end of last year, credit unions’ member business lending expanded by 45%. During the same period, banks’ small business lending fell 15%–That’s a pretty dramatic difference,” he told Nnamdi.
“Part of it is people are having a harder time getting a loan from a bank. They have a different relationship with their credit union, in that they are not just a customer but also an owner,” he said, noting that “credit unions have stepped forward to fill that void in some markets in terms of business lending.”
Prior to 1998, there were no restrictions on credit union business lending, Cheney said. The current MBL cap–12.25% of assets–”is a very low percentage. We’re trying to raise the cap modestly for credit unions that have experience in business lending and are close to the cap, so they can do more to help small businesses, and we have legislation pending in Congress to do just that.”
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