Last week’s hearing on jobs and small business yielded several interesting discussion points, particularly when Rep. Ed Royce (R-Calif.) and a witness agreed that small lenders such as credit unions play a major role in lending to startup businesses. The Credit Union National Association (CUNA) also submitted a letter for the record of that hearing, imploring the committee to make meaningful changes to member business lending statutes.
“I’m an advocate for regulatory relief for our nation’s community financial institutions when it comes to their ability to lend. Legislation I’ve authored, H.R. 1188 or the Credit Union Small Business Jobs Creation Act, would free up smaller lenders when it comes to working with business startups,” Royce said, referring to his bill that would raise the member business lending cap to 27.5% of assets, up from the current 12.25% required by statute.
Royce then asked a witness how Congress can help financial institutions increase lending to startups. Witness Raymond Keating, chief economist at the Small Business and Entrepreneurship Council, replied by saying small financial institutions are crucial for small businesses.
“When you look at their share of loans to small businesses, they’re it. They’re critical. The regulatory costs of, for example, Dodd-Frank and so on fall more heavily on them, and small businesses get hurt as a result,” he said.
In addition to the CUNA-supported H.R. 1188, Royce has introduced another CUNA-backed bill that would give credit unions parity with banks by exempting loans to purchase one- to four-unit non-owner occupied residential dwellings from the member business lending cap.