Wisconsin CU League News Release - 09/06/11

 

WI citizens say increasing credit union business lending is a “no brainer,” but Congress deaf

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Pewaukee, Wis. – Credit unions all over Wisconsin and the country have ample funds and a willingness to lend to stimulate the economy – and could quickly add as much as $405 million in new credit that would create 4,400 new jobs in our state alone – but their hands are tied by an arbitrary federal cap on their business lending. 84% of Wisconsin voters support removing this limitation and Forbes magazine has called it a “no brainer.” Still, Congress has refused to act even while it continues to hand tax dollars to banks for the same purpose.

 

“Just last week, two for-profit wisconsin banks were handed $16.5 million in taxpayer funds,” said Brett Thompson, President & CEO of The Wisconsin Credit Union League. “Yet, as we’ve seen throughout the economic downturn, throwing taxpayer money at shareholder-owned banks fails to help main street businesses. It’s appalling that credit unions – which could do more and want to do so much more for the local people who own them – have to turn down loans that could put people to work immediately because Congress would rather listen to for-profit banking industry lobbyists.”

 

Thompson was referring to the U.S. Treasury’s release last week of $767 million more to U.S. for-profit banks, presumably to get credit flowing. $15 million went to a bank holding company in Manitowoc and $1.5 million to another in Pigeon Falls. The funds are from a $30 billion slush fund of taxpayer money Congress earmarked for banks last year as part of the so-called “TARP II.” Yet the business press is still asking, where are the loans?

 

“Why direct taxpayer money to just two for-profit banks when member-owned credit unions all across the state could use their very own money to lend to small businesses to create jobs?” Thompson asked.

 

Wisconsin banks’ business lending decreased by $63 million in the year preceding March 2011 – the third straight year of decreases despite government’s influx of funds for that purpose. Credit unions increased their lending each of those years – by $90 million in just the year preceding March – to compensate, but many have maxed out what they can lend because federal law caps their business lending at 12.25% of total assets. Federal regulators support legislative language that would raise the cap to 27.5% of total assets, but banking trade groups have opposed it.

 

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