Credit unions could offer more small business loans if Congress approves
To help entrepreneurs gain access to capital tostart an LLC, the CEO of the nation’s credit union association is calling on the U.S. Congress to allow credit unions to do more small business lending.
Credit unions are currently capped by federal law from lending more than 12.25 percent of their assets to small businesses, writes Bill Cheney, CEO of the Credit Union National Association, in the Huffington Post. A proposed bill in the U.S. House of Representatives would raise that cap to 27.5 percent, and, according to Cheney, “create more than 100,000 new jobs, and inject $10 billion into the economy, both at no cost to taxpayers.”
He notes that during the recession of 2008 and 2009, business lending at credit unions actually increased, and blames big banks for holding up legislation that could open up credit unions further.
“Unless Congress grants its permission, credit union business lending will have to slow down – and that does nothing to help struggling small firms.”
President Barack Obama supports raising the lending cap limit for credit unions, which could provide not only financing for debt or real estate purchases, but also startup capital for new companies.