WASHINGTON - CUNA President Dan Mica used today's Senate hearing on regulatory restructuring to make another pitch for lifting the cap on member business loans, but after the session Senate Banking Committee Chairman Christopher Dodd said he wants to proceed with caution because of concerns about regulatory oversight.
"We can put $10 billion on Main Street in small business loans,'' Mica said in response to a question from Sen. Charles Schumer (D-N.Y.) who has said he plans to introduce legislation to lift the cap.
Schumer said it was needed because many banks have slowed down their lending and businesses with good credit are losing their lines of credit.
But Dodd (D-Conn.) told reporters after the hearing that before removing or lifting the cap, his panel needs to be certain that the NCUA has the capacity to deal with additional commercial lending. He also said that the panel might look into lifting the cap temporarily during the current recession or raising the cap, rather than eliminating it altogether. Currently it is set at 12.25% of a credit union's assets.
During the hearing, Bancorp South Chairman/CEO Aubrey Patterson challenged Mica's argument about the need to change the cap. Patterson, who testified on behalf of the American Bankers Association, said "most credit unions are well within the cap they have today.''
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