Credit unions seeking expansion of business lending

The Credit Union National Association (CUNA) says the bill will not require any taxpayer support. 

To move the bill along, CUNA, along with more than 500 credit union and small-business leaders, are heading to Capitol Hill on Tuesday and Wednesday to push lawmakers for passage of the measure. 

Earlier on Monday, the measure had been expected to hit the Senate floor sometime this week, but the bill has been pushed off for now, sources said. 

{mosads}A similar bill is pending in the House.

In September, CUNA released an analysis countering the objections of the banking trade associations.

As of June, credit unions held nearly $42 billion in loans to small businesses, representing about 6 percent of all small-business loans at financial institutions.

Credit unions argue that raising the cap would create at least 140,000 jobs and that it wouldn’t undermine the safety of its deposits or cut into the banks’ market to lend to small businesses, noting that most aren’t close to hitting current limits. 

If credit unions were to take advantage of the expansion of lending from raising the cap, which was implemented in 1998, that would leave at least 88 percent of the market to banking institutions, the analysis showed. 

CUNA estimates that raising the business lending cap would allow credit unions to increase business lending by up to $14 billion in the first year after the cap is lifted. 

Hundreds of credit unions are at or near the cap, and many thousands of credit unions and many will benefit from a restoration of business lending authority, the report showed.