Let's call today Advocacy Friday because we have a couple of issues that we want to share with you. The first is below and has to do with a piece of federal legislation. We'll post the second - about an issue before Philadelphia City Council - later today.
We are often made aware of legislation pending before Congress that would either help or hurt various parts of the cooperative movement. Recently, we received a communication about The Small Business Lending Enhancement Act which would raise an arbitrary cap on the amount that credit unions (which are kind of like but not exactly like cooperatively owned banks) can lend to small businesses. We pass this along without much comment since we're not experts on banking - just yet - but eventually we'll be looking for financing for this Co-op and a credit union may just be one of our options. So let's help 'em out!
Credit Union Lending Cap Increase Needs Your Support The National Cooperative Business Association is asking members and all friends of cooperatives to demonstrate their support of S. 2231, which will enable credit unions to support economic growth through increased small business lending. The bill is in the US Senate, and critical action on this bill could come in the next few weeks. It’s important that members of the Senate hear from the cooperative community about the importance of voting in favor of this legislation. What does S. 2231 do? S. 2231 would raise the credit union member business lending cap from 12.25 percent of assets to 27.5 percent for eligible credit unions and task the National Credit Union Administration with writing safety and soundness regulations to implement the added authority. To be eligible, a credit union would have to be at or near its current cap, have at least five years’ experience in member business lending and be in a strong capital position. In addition, the credit union would not be allowed to grow its MBL portfolio more than 30 percent a year. Why it’s important. Credit unions have been subject to an arbitrary cap on lending since the passage of the Credit Union Membership Access Act of 1998. The Small Business Lending Enhancement Act would significantly increase the amount of money credit unions are allowed to invest in small businesses. The Credit Union National Association estimates that passing this legislation could provide up to $13 billion to small businesses in the first year alone and create over 140,000 new jobs at no cost to taxpayers. NCBA asks its members to call and email their senators in support of S. 2231. You may send an email to your senators by using this action alert tool, created by CUNA: http://capwiz.com/cuna/issues/alert/?alertid=60924641&PROCESS=Take+Action To call your senators’ offices, dial the US Capital switchboard at 202-224-3121. When speaking with your senator, please relate the following message: "I am contacting you to ask for your support on S.2231, The Small Business Lending Enhancement Act. America’s small businesses are the driving force of employment and economic improvement. In a recent survey, 90 percent of small businesses reported the availability of credit for small businesses is a problem. In fact, 61 percent of these same small businesses said it’s harder to get loans today than it was a few years ago. One of the easiest ways to help these small businesses gain access to the credit they need and start hiring is to lift the credit union member business lending cap." By allowing credit unions to make more business loans, we’ll be putting more Americans to work and improving our economy. In fact, it’s estimated that 140,000 jobs would be created by lifting the cap. Please help America’s small business owners and American workers by supporting S. 2231, the credit union small business jobs bill. Thank you for your support of cooperatives. Sincerely, Liz Bailey Interim President and Chief Executive Officer