WSJ Story Highlights Major CU Business Lending Project in Michigan (Misc News: June 28, 2012)
A story in The Wall Street Journal highlights a business lending project where United FCU is helping to rejuvenate a long destitute town and reuse an old factory site.
United, based in St. Joseph, is providing an $8.5 million loan to the developer for the 20-acre mixed-use project, the final phase of a $70 million project.
The development sits on the site of a long-shuttered Whirlpool factory in Benton Harbor, a town with high unemployment and crime. Interestingly, United was founded in 1949 by five Whirlpool employees. The company was founded in 1911 in the Twin Cities.
The last phase of the project, which already includes a Jack Nicklaus-designed golf course, will have a hotel, condos, cottages, a conference center and a 105-slip marina on the St. Joseph River, which divides the two towns. Click here to read the password-protected story titled "A Reinvention of Michigan."
United President/CEO Gary Easterling said financing hometown projects is important for the credit union.
"We feel like it's a good risk and the thing to do for the community," Easterling said.
The project illustrates how credit unions have increased business lending during the last several years. In fact, many credit unions want to do more member business lending, but cannot because of a cap on credit union business lending.
CUNA and the state leagues, including MCUL & Affiliates, are pushing for Congress to raise the MBL cap. Currently set at 12.25 percent, a bill in Congress would raise the cap to 27.5% of assets with controls in place to make sure member business lending is done safely.
The Journal quoted statistics from CUNA showing that as banks have reduced business lending during the last five years, credit union business lending has increased. From the end of 2007 through March, credit union MBLs have increased 47% to $41 billion while bank business loans have contracted 14% to $654 billion.
Ten of Michigan’s 15 congressmen and both U.S. senators have signed on as cosponsors of the bill. Senate Majority Leader Harry Reid, D-Nev., has promised a vote on the measure, but it may be delayed until fall while supporters line up enough votes for it to pass the Senate.
Click here to visit the league’s Grassroots Action Center to send your congressman a request to support the bill or thank him or her for their cosponsorship.