CUNA Calls on Senate Banking Committee to Push MBL (Misc News: March 7, 2012)
CUNA is urging the Senate Banking Committee to include a provision allowing credit unions to expand member business lending in any new jobs and capital formation legislation that they will be considering and to reject pleas by bankers to keep the legislation out of the package.
The association called the MBL reform a “common sense” way to boost the economy by helping small businesses and creating jobs, according to CUNA News Now.
In the letter to Senate Banking Committee Chairman Tim Johnson, D-S.D., and ranking member Richard Shelby, R-Ala., CUNA President/CEO Bill Cheney noted that the only opposition to the credit union member business lending bill (S. 509) comes from organizations representing banks. He went on to say that banks have pulled back access to credit from their small business customers during the financial crisis.
In his letter, Cheney pointed out that Congress bailed out the banks in 2008 with TARP and made available $30 billion of taxpayer money to lend to small businesses, but the banks took only a fraction of that money and used most of what they took to refinance their TARP obligations.
“The only opposition to S. 509 comes from organizations representing the banks that pulled back access to credit from their small business customers during the financial crisis,” Cheney wrote.
Cheney said that banks are currently asking the committee for regulatory relief, but the American Bankers Association has said that it will flip its position and oppose regulatory reforms if Congress approves an increase in MBL for credit unions.
"After devastating the housing market, retreating from the small business market, receiving taxpayer bailout after taxpayer bailout, being begged by the government to lend to small businesses and refusing that call, America's banks now come to Congress with the message: they will oppose their own regulatory relief legislation if Congress allows the credit unions to provide more assistance to small businesses," the CUNA president wrote.
CUNA estimates show that during the first year after enactment of legislation to increase the MBL cap to 27.5 percent, up from the current 12.25 percent, small businesses would see a $13 billion infusion of new credit and the general economy would witness the creation of 140,000 new jobs--all at no cost to taxpayers.
The CUNA letter coincided with the second in a series of hearings called "Spurring Job Growth Through Capital Formation While Protecting Investors."