President Obama is expected to unveil his jobs package this week.
In considering provisions that would promote job growth, we hope that the president will recognize one important solution that would not cost taxpayers one cent and would help small businesses and create jobs: raising the arbitrary member business lending cap on credit unions. Currently, credit union member business loans are arbitrarily limited by law to 12.25 percent of assets.
The president has called for bipartisan, common sense steps that will make a difference. We believe that the legislation pending in both houses of Congress embodies these characteristics. The Small Business Lending Enhancement Act of 2011 (S. 509 and H.R. 1418) would raise the credit union member business lending cap to 27.5 percent of assets. These identical measures represent a carefully crafted compromise between key lawmakers, the National Credit Union Administration and the Department of Treasury.
While there are other lending vehicles available to small business, even they have challenges. For example, the Small Business Administration 7A loan program is anticipated to reach its $17.5 billion lending cap by Sept. 30. Additionally, the Small Business Lending Fund established to provide cheap capital to community banks for small business loans, has not proven very popular. To date, community banks have only requested $1.8 billion of this money.