CUNA said Wednesday in a release it has responded to a letter the Independent Community Bankers of America sent to Senate banking staffers Tuesday that discourages them from supporting S. 2231, the bill that would raise the member business lending cap to 27.5% of assets.
“Congress shouldn't statutorily increase the cap until there has been time to evaluate how effectively the new (low-income) designation for 676 credit unions has been implemented and if, in fact, it has increased small business lending,” wrote ICBA Vice President of Congressional Relations David Lynch, referring to the NCUA's low-income initiative launched in August.
CUNA President/CEO Bill Cheney followed up with a letter of his own, telling Senate legislative directors and Financial Services legislative assistants that the banking lobby's opposition to S. 2231 is the greatest obstacle credit unions face when attempting to provide more credit to small businesses.
“The bankers may want you to believe that the obstacle to credit union business lending has been removed by the credit union regulator,” Cheney said of the NCUA's low-income initiative.
“Their opposition to this legislation completes a one-two punch to the gut of America's small businesses,” he continued. “First, they abandoned them during the financial crisis when small bank small business lending went down; now they oppose legislation that would allow the credit unions that continued to lend when they pulled back to do more to help small businesses.”
Cheney further pointed out that of the 1,000 credit unions that received the low-income offer from the NCUA, 774 do not offer business loans. Additionally, he said, only 34 of the 1,000 are close to the current cap of 12.25% of assets.
Back in March, Senate Majority Leader Harry Reid (D-Nev.) promised credit unions a vote on S. 2231 this year, but the bill has not progressed to the Senate floor. While a vote during the post-election lame duck session is possible, Congress also has a number of high priority issues to address, including the so-called fiscal cliff.
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