Contact: Christine Henzig
800-242-0833, Ext. 6019
chenzig@theleague.coop
League says $30 billion provision for bank credit won’t help in light of banks’ own reasons for restricting loans
Pewaukee, Wis. – A key amendment to a bill directed at helping small businesses obtain credit and create jobs is sitting on a shelf, while Congress directs billions of additional taxpayer dollars at for-profit banks – the very same banks that cannot or will not increase their lending to small businesses.
Congress has so far failed to attach to the Small Business Lending Fund Act the important amendment authored by Senator Mark Udall (D-CO) that would raise the current cap on credit unions’ member business lending from 12.25% of assets to 27.5% of assets. Groups representing realtors, independent businesses, grocers, manufacturers, the Treasury Department and credit union regulators all support proposals allowing credit unions to increase their safe and sound commercial lending to small businesses. But banks have stood in the way, threatening to oppose a bill that includes additional business authority for credit unions – although it comes at no cost to taxpayers and would help generate loans that banks are unwilling to make.
“Banks have admitted they are unlikely to increase their business lending because of regulatory pressure that has forced them to restrict their lending,” said Brett Thompson, President & CEO of The Wisconsin Credit Union League. “So, knowing full well they’re not going to step up to help, it’s ill-conceived that Congress would allow banks to block a credit union provision that could preserve jobs and get Wisconsin firms moving again.”
The Wall Street Journal reported in March that bank lending has declined at the sharpest rate since 1942. Wisconsin credit unions have worked to fill this credit void, increasing their business lending by 11% from March 2009 to March 2010, while Wisconsin banks saw a 19% decrease in business lending over that same period. The average business loan at a Wisconsin credit union is just $174,772, a pittance compared to the multi-million dollar loans banks typically seek, and more than half of credit unions’ business loans go to households with incomes below $50,000.
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ABOUT THE WISCONSIN CREDIT UNION LEAGUE
The Wisconsin Credit Union League is the state trade association for Wisconsin’s not-for-profit credit unions. For more information, visit http://www.theleague.coop.
ABOUT CREDIT UNIONS
Credit unions are cooperative financial institutions that are owned by their members and do not have stockholders. Because they are not-for-profit, they return earnings to members in the form of more competitive rates of return on accounts, lower interest on loans, lower fees and improved services. Around 2.2 million Wisconsin residents belong to credit unions, of which nearly half are open to the local community. Find a credit union to join by looking in the phone book or by visiting http://www.cudifference.org. Read the latest annual report for Wisconsin credit unions at http://www.theleague.coop/annualreport.
