America's small businesses are our nation's economic growth engine. The effects of the financial crisis of the past few years have spread to all types of lending, resulting in a reduction in the availability of business credit.
Unemployment remains high. America's small businesses could create jobs, if they are given access to capital. Credit unions can provide them with $13 billion in capital.
The arbitrary cap on credit union member business lending has no economic, safety and soundness, or historical rationale. In fact, credit unions have been lending to their business-owning members for a century, and credit union business loan losses are much lower than those for business loans made by banks.
At a time when banks are withdrawing credit from America's small businesses, credit unions have actually been expanding credit to small businesses, but this growth is threatened with more credit unions approaching the cap. It makes economic sense to permit credit unions to lend additional capital to their business-owning members.
The average credit union business loan nationwide is approximately $220,000, $189,239 in New Jersey. When a credit union lends to one of its business-owning members, the capital can be used to keep the business competitive and hire additional employees.
Banks have been reducing credit availability, and even after receiving $30 billion of taxpayer money, banks still are not meeting the demand for small business loans. Credit unions have a strong business lending track record and will do better than the banks' failed efforts to help small businesses, all without any cost to the taxpayer.
Finally a Jobs Program Both Republicans & Democrats Can Love
Bi-partisan legislation is pending in Congress to enable credit unions to lend more and help put Americans back to work, at no cost to taxpayers.
The Credit Union Small Business Jobs Act (S. 2231) and the Small Business Lending Enhancement Act (H.R. 1418) would increase the current credit union member business lending cap from 12.25% to 27.5% of assets, but only for "well capitalized" credit unions.
This small increase could provide a taxpayer-free infusion of $13 billion in capital to small businesses to create 140,000 jobs nationally.
The legislation has strong bi-partisan support with 21 Senate and 128 House co-sponsors. The Obama Administration has also endorsed this approach.
Bankers have been busy opposing the bill and attacking credit unions' core message points. The ABA recently launched a campaign contacting members of Congress with their reasons against the legislation, however, there are many inaccuracies in their arguments. Click here to view a Fact Check of the ABA's MBL Propaganda.
1.2 Million NJ Credit Union Members are Ready to Help put America Back to Work
What Can You Do to Help?
Email Your Lawmakers on Capitol Hill:
Online Grassroots Action Center
Write Your Lawmakers on Capitol Hill:
Sample Letter to Senators Lautenberg & Menendez
Sample Letter to Your Congressman
NJ Congressional Delegation Contact Information
Find Your Congressman's Name & Address
Make Telephone Calls:
MBL Reform Talking Points
Write an Op-Ed Piece: