President Obama should support an increase in credit unions’ member business lending cap in order to jump-start job creation, according to the National Association of Federal Credit Unions.
In an op-ed in the Washington Post’s Capital Business publication, NAFCU President Fred Becker wrote about the benefits of legislation pending in both the Senate and House that would raise the credit union member business lending cap from the current limit of 12.25 percent of total assets to 27.5 percent.
The legislation would help meet President Obama’s goal of helping small businesses and fostering job creation, according to the NAFCU. It also meets the president’s criteria of being a “bipartisan, common sense step that can make a difference in creating jobs,” Becker wrote.
Lifting the cap would also help credit unions who lend to small businesses and would be a unique solution because “raising the credit unions’ member business lending cap does not require additional funding,” Becker wrote.
The legislation was created by the Treasury Department, the NCUA and lawmakers and includes provisions such as prohibiting a credit union from being allowed to grow its member business loan portfolio by more than 30 percent annually.
The legislation also requires credit unions to have five consecutive years of experience in underwriting and servicing member business loans before being eligible to exceed the 12.25 percent cap.