Rep. Ed Royce (R-Calif.) reintroduced legislation on Thursday that would raise the credit union member business lending cap to 27.5 percent of assets, which would allow credit unions to lend an extra $13 billion to small businesses.
“Credit unions understand that in order for the economy to fully recover, small businesses need access to credit, which will help their businesses grow,” Credit Union National Association President and CEO Bill Cheney said in a letter of support for the bill. “Credit unions have capital to lend, a history of prudent and safe small business lending, and a mission to help provide access to credit to their members—including their small business-owning members. They just need Congress to enact your legislation.”
The extra lending that would be available to small businesses as a result of the legislation, which is co-sponsored by Rep. Carolyn McCarthy (D-N.Y.), would help small businesses create more than 140,000 new jobs. Cheney said that bankers are the only party opposed to the legislation.
“The bank lobby opposes this bill because they oppose credit unions; their arguments are without merit,” Cheney said. “The bill will not endanger the small banks in your community; the bill will not alter the nature or focus of credit unions; the bill is not inconsistent with the credit union mission or the purpose of their tax status. This legislation recognizes that credit unions are working in their communities to help small businesses, and it is important to enact even though the bank lobbyists oppose it.”
In order to qualify for the higher cap, a credit union is required to be well capitalized, be operating at or near the current cap of 12.5 percent of assets for at least one year, have a history of member business lending experience and receive approval from the National Credit Union Administration.
H.R. 1418, the original version of the bill, failed last year despite gaining 144 co-sponsors. Efforts to introduce S. 2231, the Senate version of the bill, to a vote were halted when it became apparent that the legislation did not have the support required to pass.