CUNA continues to call for MBL relief to get capital to businesses

March 16, 2021

The Paycheck Protection Program has played an important role in keeping small businesses and their employees afloat during this crisis. Credit unions helped Main Street America by facilitating more than 200,000 PPP loans that averaged just $47,000.

However, looking beyond PPP, the arbitrary credit union member business lending (MBL) cap is an obstacle for businesses to get capital and should be at least temporarily lifted, CUNA wrote to the Senate Small Business Committee.

"Even temporarily lifting the cap will result in more credit union business lending.  While credit union business lending has increased greatly since the Great Recession, many credit unions are now approaching the 12.25% of assets cap,” the letter reads.

CUNA strongly supports legislation introduced by Reps Brad Sherman (D-Calif.) and Brian Fitzpatrick (R-Pa.) that would exempt disaster related loans from the MBL cap during and for up to one year after the declared national emergency.

“Representatives Sherman and Fitzpatrick recently introduced legislation (H.R. 1471) that would lift the cap for the duration the COVID-19 pandemic and for one year following its declared end. We conservatively estimate that temporarily removing the MBL cap, this legislation will provide over $5.5 billion in capital to small and informal business ventures, creating nearly 50,000 over the course of the next year.”

CUNA also notes that additional credit union lending will not impede bank activity, instead Small Business Administration research shows that roughly 80% of credit union business loans are loans banks would not make.