Matz added that just one credit union of the 55 that failed in 2009-2010 was directly a result of business lending, and 2,200 credit unions offer business loans. Senate Banking Committee Ranking Member Richard Shelby (R-Ala.) smiled and pointed out that a lot more banks failed than credit unions during that period.

While Matz is–to the extent an industry regulator can–championing the issue on the Hill, the implementing regulation will be a key factor. The NCUA has to show it will be a tough regulator of credit unions getting into business lending but cannot go overboard as to stifle the opportunity.

If the business lending expansion ever happens at all. During the hearing, the banking trade representatives jumped up and down with their usual histrionics about not allowing credit unions to expand their business lending authorities because of the tax exemption. The public policy reason for the tax exemption is the social good that credit unions provide, not because of their limited authorities. In fact, the tax exemption is decades old versus the business lending cap, which dates from 1998. The purpose of the business lending cap was a trade off for expanded fields of membership in H.R. 1151 that would have been extremely curtailed as a result of the American Bankers Association suit against the NCUA.

The tax exemption is the perennial boogey man of the credit union trades and the banking trades' excuse for existing when there's nothing important going on (like, say, a deep, prolonged financial crisis). The banking trades use the tax exemption to demonize the credit unions among the banks as well as absurdly trying to frame credit unions as not doing their patriotic duty.

But there are more problematic issues that stand in the way of credit unions' expanded business lending efforts. For starters just four members of the 22-member Banking Committee showed for any part of the hearing. They aren't serious about this. When they're interested or it's something worth making political hay over, members of Congress do what they can to get on the record.

Though not a committee member, notably absent from the dais at the hearing was the bill's sponsor, Sen. Udall. His Colorado cohort Michael Bennet did attend. None of the 18 co-sponsors of the bill attended the hearing either, three of whom serve on the Banking Committee.

Finally, the banking trades will scream bloody murder if credit unions are permitted to expand their business lending. Then elected officials and their campaign managers will not touch the issue with a 10-foot pole–pun intended.