WASHINGTON — Two senior members of the House Financial Services Committee on Monday introduced H.R. 1188, the Credit Union Small Business Jobs Creation Act, which would increase the member business lending cap for qualified credit unions to 27.5% from its current 12.25%.
U.S. Reps. Ed Royce (R-Calif.) and Gregory Meeks (D-N.Y.) said they both urge "swift action" from their colleagues to advance what they termed "bipartisan" legislation.
"Current regulations arbitrarily cap the ability of our nation's credit unions to lend to small businesses. Main Street businesses looking to expand and hire more workers have suffered as a result," Royce said in a statement. "The Credit Union Small Business Jobs Creation Act removes this obstacle to lending and ensures that qualified credit unions are better able to support Americans who need loans to start, sustain, or grow their businesses."
"By increasing the business lending cap on credit unions, this bill will create jobs, grow the economy, and help businesses throughout the country," said Meeks. "It has long been known that small businesses are the key engine of job growth in this country. But only qualified and responsible credit unions with a history of business lending will be eligible under this bill. This is necessary to ensure the stability and an appropriate balance with our financial institutions."
The two Representatives said their bill would increase the MBL cap for certain credit unions meeting the following requirements: the CU must be well capitalized, have at least a five-year history of member business lending experience, be operating near its current cap (at least 80%) for at least one year, and receive approval from NCUA for a higher cap.
Both NAFCU and CUNA on Monday issued statements commending the two Representatives for introducing the legislation.
"We thank Reps. Royce and Meeks for their continued commitment to credit unions and their confidence in credit unions' ability to help small business," said Berger. "This bill would help credit unions do more to meet the credit needs of their member small businesses and, in turn, help grow jobs. We look forward to working toward its enactment."
"I thank Reps. Royce and Meeks for their strong leadership and support of credit unions and small businesses," said CUNA president and CEO Jim Nussle. "This common sense legislation would allow credit unions to do so much more to help small businesses grow, creating jobs for hard working Americans and boosting our economy."
NAFCU noted Monday's bill is similar to H.R. 688, which was introduced in the most recent Congress by Rep. Royce and Rep. Carolyn McCarthy, D-N.Y. Similar to previous versions, Monday's bill would restrict growth in MBL portfolios to no more than 30% per year for credit unions authorized for the higher cap.
CUNA estimated raising the MBL cap would create 140,000 new jobs and allow credit unions to lend an additional $13 billion to small businesses, with no cost to taxpayers.
The bill from Reps. Royce and Meeks follows a bill introduced last week that would make it easier for veterans to get access to member business loans at credit unions, and is one of several credit union-friendly initiatives presaging CUNA's Governmental Affairs Conference next week, when credit union representatives will be "hiking the Hill" to lobby their lawmakers on a variety of topics of interest to credit unions.