Posted By Rohit Arora On June 27, 2012 @ 11:00 am In Economic Trends | 5 Comments
The Credit Union Small Business Lending Act (H.R. 4191) is bipartisan legislation introduced by Kurt Schrader (D-Ore.) and Steve Chabot (R-Ohio), that would make it easier for credit unions to participate in the SBA small business loan programs.
SBA lending has been critical to helping the growth of small business, which creates the lion’s share of new jobs in the U.S. economy. Passage of the Credit Union Small Business Lending Act would enable credit unions to provide more loans to small companies. This, in turn, would spur further economic recovery.
Another important piece of legislation before Congress is H.R. 1418, which would raise the credit union member business lending (MBL) cap from 12.25% of assets to 27.5% of assets.
At a time when big banks typically reject nine out of 10 funding requests from small business owners, credit unions have filled the void. In the past 12 months, they have steadily upped their loan approval percentages and have become an increasingly important source for capital. Removing the 12.25% asset cap and allowing them to increase their small business lending can only help make things better as the economy continues to rebound.
Month Credit Unions, SMB Loan Approval %:
May – 11 51.20%
Jun – 11 52.30%
Jul – 11 53.40%
Aug – 11 54.20%
Sep – 11 55.50%
Oct – 11 56.60%
Nov – 11 57.00%
Dec – 11 57.40%
Jan – 12 57.60%
Feb – 12 57.80%
Mar – 12 57.90%
Apr – 12 57.40%
May – 12 57.60%
* source: Biz2Credit Small Business Lending Index for May 2012
“Allowing credit unions to do more to help small businesses is an important step toward helping our nation recover from the current economic downturn,” said Robert Marquette, president and CEO of Members 1st Federal Credit Union in Mechanicsburg, PA. He is also an at-large director for the NAFCU, the National Association of Federal Credit Unions, the only national organization that focuses exclusively on federal issues affecting credit unions.
“On behalf of America’s credit unions, their 94 million members and small businesses, we urge Congress to act to pass both of these important job creating bills, H.R. 1418 and H.R. 4191,” added Marquette, who informed the House Small Business Committee Subcommittee on Investigations, Oversight and Regulations that the average loan size for MBL loans is $185,000, and that since the end of 2007, business loan applications have grown from $87 million to $259 million in 2011.”
I agree with Robert Marquette. Removing the restrictions on credit union lending will keep capital free flowing. That, in turn, will help spur business growth and job creation.
Find Capital  Photo via Shutterstock
Article printed from Small Business Trends: http://smallbiztrends.com
URL to article: http://smallbiztrends.com/2012/06/credit-union-small-business-lending-act.html
URLs in this post:
 Find Capital: http://www.shutterstock.com/pic-87350357/stock-photo-detail-of-a-one-hundred-dollar-bill-through-a-magnifying-glass.html