Wisconsin CU League News Release - 07/30/10
Congress yet to act on credit union provision to help main street
businesses
League says $30 billion provision for bank credit won’t help
in light of banks’ own reasons for restricting loans
Pewaukee, Wis. – A key amendment to a bill directed at
helping small businesses obtain credit and create jobs is sitting on a
shelf, while Congress directs billions of additional taxpayer dollars at
for-profit banks - the very same banks that cannot or will not increase
their lending to small businesses.
Congress has so far failed to attach to the Small Business Lending Fund
Act the important amendment authored by Senator Mark Udall (D-CO) that
would raise the current cap on credit unions’ member business
lending from 12.25% of assets to 27.5% of assets. Groups representing
realtors, independent businesses, grocers, manufacturers, the Treasury
Department and credit union regulators all support proposals allowing
credit unions to increase their safe and sound commercial lending to
small businesses. But banks have stood in the way, threatening to oppose
a bill that includes additional business authority for credit unions
– although it comes at no cost to taxpayers and would help
generate loans that banks are unwilling to make.
“Banks have admitted they are unlikely to increase their business
lending because of regulatory pressure that has forced them to restrict
their lending,” said Brett Thompson, President & CEO of The
Wisconsin Credit Union League. “So, knowing full well
they’re not going to step up to help, it’s ill-conceived
that Congress would allow banks to block a credit union provision that
could preserve jobs and get Wisconsin firms moving again.”
The Wall Street Journal reported in March that bank lending has declined
at the sharpest rate since 1942. Wisconsin credit unions have worked to
fill this credit void, increasing their business lending by 11% from
March 2009 to March 2010, while Wisconsin banks saw a 19% decrease in
business lending over that same period. The average business loan at a
Wisconsin credit union is just $174,772, a pittance compared to the
multi-million dollar loans banks typically seek, and more than half of
credit unions’ business loans go to households with incomes below
$50,000.
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