PITTSBURGH (7/20/15)--An article in the Pittsburgh Business Times, with input from the Pennsylvania Credit Union Association, describes how the U.S. Small Business Administration (SBA) district office is working to attract more credit unions to participate in its programs.
Kelly Hunt, district director for the Pittsburgh SBA office, told the Times her office is working to bring more credit unions into the fold.
The PCUA has also been active in those efforts, Michael Wishnow, PCUA senior vice president, told the Pittsburgh Business Times. “We've made a concentrated effort to work with small business development centers across the state which use the SBA loans quite a bit," Wishnow said. "We're trying to partner with as many groups within local communities as possible that can help put deals together where credit unions can play a role."
The article also describes the National Credit Union Administration proposed member business lending rule changes.
The proposed rule removes or modifies a number of MBL restrictions, including: personal guarantee requirement, 80% limit on loan-to-value ratios; limit on unsecured MBLs; requirement that staff have two years of direct experience; detailed limits on construction and development loans; and the 15% of net worth limit on loans to one borrower, which will now increase to 25% if the additional 10% is supported by readily marketable collateral (News Now July 2).
CUNA President/CEO Jim Nussle has called the proposal a “step in the right direction,” but said that more can be done, and that CUNA will be seeking further regulatory relief, including legislation to lift the cap of 12.25% of a credit union’s assets.
"Many credit unions are finding it more and more difficult to extend credit because they're bumping up against arbitrary caps,” Wishnow said.
One area credit union, Clearview FCU, Moon Township, Pa., has a business loan portfolio of about $40 million, the article said.
"It's grown maybe $10 million since I've been here the last two and a half years," Jim Wood, Clearview's vice president of lending, told the Times. "To a bank, that's maybe not even a good month, but when you start with such a small portfolio, it's very easy to grow it. That's more of a reflection of the economy than anything we've done differently."
Clearview and five other credit unions created a credit union service organization, Keystone Business Lending Solutions LLC, in 2007, which enabled the credit unions to make larger loans.