Enhancing Small Business Lending
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In an election year, when Congress has a hard time agreeing on anything, both parties agree that they need to do more to promote job growth. The Senate has the opportunity to vote on a jobs bill that would empower America’s credit unions to lend more to small businesses.
The bill, S. 2231, titled the “Small Business Lending Enhancement Act of 2012,” would raise the total amount of small business loans a credit union could issue from 12.25% of a credit union’s total assets to 27.5%. Economists estimate this bipartisan bill would create 140,000 jobs and infuse $13 billion into the economy… at zero cost to taxpayers.
Credit unions, unlike banks, are not-for-profit entities. This means that instead of dividing their profits among shareholders, credit unions reinvest profits to its member-owners. However, since 1998, credit unions have been limited in the amount of money they could lend to small businesses. This arbitrary cap was inserted into the Credit Union Membership Access Act by bank lobbyists who feared that the credit unions’ expansion would threaten banks’ dominance.
In today’s struggling economy, America needs to set aside the concerns of special interests groups and focus on incentives that will create jobs and drive our economy. By passing S. 2231, Congress will authorize the release of an estimated 13 billion dollars of private investment into the United States economy.
While business lending by banks has fallen 14.86% since the beginning of the recession in 2007, credit unions have increased their small business lending by 44.91%.
This money would specifically target small businesses, which are most likely to create new jobs. Unlike TARP or other bank bailouts, there would be no taxpayer money used. This would simply allow the credit unions to use the money they already have to invest in Main Street America.
Call To Action
Together we can tell Congress to pass this bill and help get America back to work. Please take the time to call or email, your Senators and ask them to support the Small Business Lending Enhancement Act of 2012. To contact your Senators via phone, call 1-877-642-4423. To email your Senators, CLICK HERE to visit CUNA's Grassroots Action Center.