Credit unions would like to do more. Unfortunately, the arbitrary lending cap that limits credit unions' member business loans to 12.25% of assets hampers them from doing more lending. NAFCU has been diligently advocating for Congress to lift this arbitrary cap by passing the Credit Union Small Business Jobs Act, H.R. 1188, introduced by Reps. Ed Royce (R-Calif.) and Greg Meeks (D-N.Y.). Sens. Rand Paul (R-Ky.) and Paul Whitehouse (D-R.I.) introduced similar legislation in the Senate – S. 2028, the Small Business Lending Enhancement Act of 2015.

Credit unions have been widely recognized by regulators and Congress for their prudent business model and for not creating the financial crisis. Unfortunately, lawmakers, in their zeal to rein in Wall Street and the bad actors that produced our financial crisis, created legislation that lumped good actors, including credit unions, into a new regulatory regime.

Credit unions have had to manage a tidal wave of regulations as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Overregulation hits credit unions and its members with a double whammy. Every dollar credit unions allot for compliance is a dollar that is not available for lending. In addition, more than 20% of the industry, or more than 1,500 federally-insured credit unions, have disappeared since the passage of Dodd-Frank. And almost all (96%) of these have been smaller credit unions with $100 million or less in assets.

The limitations on credit unions have driven some small business owners to seek alternative sources of capital including online marketplace lenders. Unfortunately, online lenders do not offer small business owners the same consumer protections nor are they subject to the same disclosure rules and underwriting standards that apply to traditional lenders. In May, the Treasury Department recognized these issues in its white paper on marketplace lenders. NAFCU has strongly urged the Treasury and other financial regulators to promulgate rules that require online marketplace lenders to meet regulatory requirements, such as the protections of Truth in Lending Act and underwriting standards for loans.

The disparity in offerings and disclosures by online marketplace lenders underscores credit unions' vital role to Main Street's small businesses.

During this election campaign, NAFCU has met with both campaigns and urged Democratic presidential nominee Hillary Clinton and Republican presidential nominee Donald Trump to recognize the vital role credit unions represent to Main Street businesses and to the country's financial future.

Bottom line: Credit unions are a critical lifeline to Main Street. Overregulation is a burden that stymies credit unions' ability to provide vitally needed capital to help Main Street small businesses. When they succeed, we all succeed. To that end, we continue to advocate for regulatory relief for credit unions, especially lifting the arbitrary business lending cap and creating a level playing field for online lenders. This will allow credit unions to do even more to help small businesses not just survive but thrive, create more jobs and make our economy more robust.

B. Dan Berger is president/CEO of NAFCU. He can be reached at 703-522-4770 or [email protected].