Wisconsin Credit Union League: Citizens support making more business credit available at no cost to taxpayers

Contact: Christine Henzig

800-242-0833, Ext. 6019

chenzig@theleague.coop

Voters say Congress should pass an amendment with lending bill that would create jobs, grow economy

Pewaukee, Wis. – The vast majority of Wisconsin voters polled by The Wisconsin Credit Union League – 75% – say they would support an amendment that’s been proposed to the U.S. Congress to make more credit available to Wisconsin companies through credit unions.

An even larger majority of those polled – 84% – say they’d be even more likely to support the measure knowing it would create $389 million of new credit for Wisconsin firms, add 4,229 jobs here and cost taxpayers nothing.

Yet the amendment that could do just that – proposed by U.S. Senator Mark Udall as part the Small Business Lending Fund Act, H.R. 5297 – is stalled in Congress. Procedural moves in the U.S. Senate have prevented action that could help Wisconsin businesses that have nowhere else to turn for loans.

The Udall amendment would make more business credit available by raising the cap on credit unions’ member business lending from 12.25% of assets to 27.5% of assets. The provision would allow credit unions to offer more loans in the same safe, sound manner they’ve made them for years. Federal regulators support the measure, in part because of credit unions’ history of responsible business lending. As of March 2010 the delinquency rate for Wisconsin credit union business loans was 2.23% compared to banks’ 2.77%. Credit unions’ loss rate – at 0.43% – was 30% lower than that of state banks.

The measure would be a boon for small businesses with modest credit needs – the very businesses that often find it difficult to find financing. Because credit unions strive to meet their member-owners’ credit needs regardless of profit, they’ll grant smaller loans. The average credit union business loan in Wisconsin is just $174,772. Most credit union business loans go to households with incomes below $50,000.

The Wall Street Journal reported in March that bank lending has declined at the sharpest rate since 1942. In Wisconsin, banks’ business lending decreased 19% from March 2009 to March 2010. During that same period, Wisconsin credit unions increased their business lending by 11%, but many have maxed out what they can lend to businesses because of the federal cap.

Sen. Udall’s amendment mirrors legislative language sent to federal lawmakers by the U.S. Treasury earlier this year, and is backed by the Obama administration.

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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.