PORTLAND, Ore. (4/7/15)--A recent article in the Portland Business Journal describes how Oregon credit unions have ramped up their business lending in recent years.
Since 2010, business loans from Oregon credit unions have increased nearly 25% to $1.2 billion from $946 million, the April 3 article said.
Troy Stang, president/CEO of the Northwest Credit Union Association, said credit unions are willing to make loans to small businesses, which he described as the "heartbeat of America." Of the 64 credit unions in Oregon, only 45 offer member business loans (MBL), with the average loan last year at just $268,822.
"These businesses need access to capital," Stang told the Portland Business Journal. "Credit unions are willing and able to demonstrate the ability to grow with them."
Some credit unions began lending to prevent their members from leaving for other financial institutions, the article explained.
"Our entry into business lending was initially to retain (members), but we also feel that it helped us increase our consumer membership to foster that growth as well," said Guy Poppe, business lending manager for OnPoint Community CU, Portland.
OnPoint's business lending portfolio is now more $100 million and growing.
CUNA continues to press lawmakers to ease constraints on credit union member business lending. H.R. 1188, The Credit Union Small Business Jobs Creation Act, introduced by Reps. Ed Royce (R-Calif.) and Gregory Meeks (D-N.Y.) last month, would increase the MBL cap from 12.25% of assets to 27.5% of assets.
Royce also reintroduced the CUNA-supported Credit Union Residential Loan Parity Act. Under current law, when a bank makes a loan to purchase a 1-to-4 unit, non-owner occupied residential dwelling, the loan is classified as a residential real estate loan. However, when a credit union makes the same loan, it is classified as a business loan and is therefore subject to the 12.25%-of-assets cap on member business lending under the Federal Credit Union Act.
The April 3 edition of Portland Business Journal also featured a profile of Patricia Smith, president/CEO, Unitus Community CU, Portland, and a report on membership growth at the state's credit unions.