Further legislative action is needed to ensure that credit unions remain in a position to serve members and small businesses, CUNA told a House committee Tuesday for the record of its hearing on the government’s pandemic response. While CUNA appreciates actions thus far from Congress, the Treasury, and Federal Reserve, additional actions are needed.

“Looking beyond PPP, however, small businesses across the country will continue to need capital and credit unions are able to pump billions into the economy at no cost to the government. However, an obstacle impedes credit unions from fully assisting these businesses: the arbitrary credit union business lending cap which limits credit union business lending activity to 12.25% of assets,” the letter reads. “Given the financial needs of so many small businesses, now is the time to provide credit unions with additional flexibility to serve their business members by lifting the cap.”

CUNA urged the “swift passage” of the bipartisan bill from Reps. Brad Sherman (D-Calif.) and Brian Fitzpatrick (R-Pa.) that would exempt COVID-related lending from the cap for up to one year after the pandemic.

“We conservatively estimate that even temporarily removing the member business loan (MBL) cap will provide over $5.5 billion in capital to small and informal business ventures, creating nearly 50,000 jobs just over the course of the next year,” the letter reads.