It’s Time for Congress to Act

CUs, business advocates will continue to push for MBL legislation.

March 19, 2012

Timing is everything.

Our 2012 Governmental Affairs Conference (GAC) comes along a bit later this year. Typically in late February, we're meeting in late March this year.

We think this date change is perfectly timed to encourage congressional action, particularly to give credit unions the authority to make more business loans to their members.

CUNA estimates doing so would permit credit unions to lend an additional $13 billion to small businesses in the first year after enactment of the legislation, helping credit unions create 140,000 new jobs at no cost to taxpayers.


And the timing for that couldn’t be better, either.

While the unemployment rate across the nation has, mercifully, trended downward recently, there remains great concern that long-term unemployment numbers have remained virtually unchanged.

The reason behind those stagnant numbers is the lack of jobs, according to econo

mists at the San Francisco Federal Reserve. The economists compared the number of unemployed with the number of job openings in the U.S. and found a “severe and persistent weakness in aggregate demand for labor.” In other words, the number of jobs available and the number of unemployed just don’t match.

That’s where expanded credit union business lending—creating hundreds of thousands of new jobs—could make a profound contribution to the country’s economic recovery.

You can be sure that CUNA and the leagues have been sharing that view with members of Congress. Others have, as well. Here’s a rundown of some of them:

  • Alan Daley and Steve Pociask of the American Consumer Institute argue in a blog at—the website for the Capitol Hill newspaper—that legislation giving credit unions the added lending authority is about “private sector jobs, small business expansion, and benefits to credit union members through competition with banks.” This will encourage banks to ease up on credit, encouraging small-business investment and job creation, they say.
  • Brian Martin maintains in his white paper for the Progressive Policy Institute that giving credit unions more business lending power could substantially benefit smaller-business owners and “would enable credit unions to extend more credit to their existing members who are small-business owners interested in expansion or who are just starting out a new venture, while the current low cap [on business lending] may block these opportunities for growth.”
  • Eli Lehrer of the Heartland Institute, writing in The Huffington Post, notes that credit unions often “extend credit to groups having a difficult time getting it from banks and are right now sitting on millions of dollars they could lend to job creators if only Congress would repeal the regulations that stop them from doing it.”
  • A coalition of small-business groups—The Small Business Majority, Main Street Alliance, and the American Sustainable Business Council—published results of its survey of 500 small-business owners. The survey reveals that nearly two-thirds (64%) of the owners said availability of credit is a “serious/fairly serious” problem.

Certainly there are other pressing issues for credit unions: supplemental capital, housing finance reform, and, of course, preservation of the credit union tax exemption. These issues remain of deep concern to us.

But the time for action on member business lending (MBL) is now—with a window of opportunity in Congress (before the presidential election campaign obscures everything in the political space), with the voices of supporters in the business community joining us, with the reality of the economy all around us, and with thousands of credit union activists in Washington, D.C., this week at the GAC.

If we succeed, we can give credit unions more flexibility to better serve their members—for a long time to come.

The timing is always good for accomplishing that.

BILL CHENEY is CUNA’s president/CEO.