National Credit Union Administration Chairman Debbie Matz encouraged a Senate panel on Thursday to raise the cap on member business lending.
The aggregate amount of member business loans currently made by a credit union is restricted to the lesser of 1.75 times the credit union’s net worth, or 12.25 percent of the credit union’s total assets.Gonflables Noël
Senator Mark Udall (D-Colo.) has introduced legislation that would raise the cap to 27.5 percent of total assets.
Testifying before the Senate Banking, Housing and Urban Affairs Committee, Katz supported Udall’s bill.
“This statutory change would allow credit unions with well managed MBL programs to provide additional funding to meet the financial needs of their members and their communities, thereby contributing to the economic recovery and job growth,” Katz said.
Katz was backed by Bill Cheney, the president and chief executive officer for the Credit Union National Association. Cheney said Udall’s legislation would enable credit unions to lend an additional $14 billion to small businesses and create 140,000 new jobs.
American Bankers Association Chairman Stephen Wilson also testified but discouraged moving forward on the legislation, which he said would turn credit unions into tax-exempt banks.
“There is a limitation on business lending, because credit unions are tax exempt and this tax exemption is meant to be targeted at people of small means,” Wilson said.