A Statement on Lending & Job Creation

ALBANY, NY (08/20/2010)(readMedia)-- On the first Friday of August, the federal government reported a loss of 130,000 jobs in July. In addition, a recent study by the National Federation of Independent Business reported that only "40 percent of small business owners attempting to borrow in 2009 had all of their credit needs met … significantly lower than in the mid-2000s when up to 90 percent had their most recent credit request approved." These statistics prove that unemployment and credit availability continue to be the biggest problems facing our economy, 30 months into the current "Great Recession."

There is help.

It is in the form of a proposed amendment to H.R. 5297 - Small Business Job and Credit Act of 2010 currently pending in Congress. Proposed by Sen. Mark Udall, the amendment allows credit unions provide credit and create jobs by granting them increased authority to make business loans. Research by the Credit Union National Association shows that if Sen. Udall's amendment to is adopted, new credit union lending-in the first year-would create at least 100,000 new jobs and pump more than $10 million into the economy. Best of all, there is NO cost to taxpayers.

Credit unions have been making loans safely and soundly in the United States for 100 years. Since 1997, credit union business loan charge-off rates have been one-sixth the bank average (0.15 percent vs. .82 percent).

Additionally, credit union business loans grew annually by an average 25 percent from 2000 to 2009. Credit unions could do even more if Congress allows them greater capital expenditures and greater economic activity, which will ultimately result in the creation of more jobs. Giving credit unions a larger role in business lending is a logical first step towards rebuilding a fully employed national work force.

Credit unions' positive track record and steadfast commitment to their members' financial health, combined with increased business lending, is the reason many business and community groups-such as the National Association of Realtors, National Association of Manufacturers, League of United Latin American Citizens, Ford Motor Minority Dealer Association, National Farmers Unions, National Small Business Association and National Association for the Self-Employed-support expanded credit union business lending authority. The bank community is the only group opposing this pending legislation.

If you own a small business, want to start one, or agree that credit unions should have more lending power to help solve the current economic situation, now is the time to call your Congressional representative and ask them to support Sen. Mark Udall's amendment to H.R. 5297, the Small Business Job and Credit Act of 2010.

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The Credit Union Association of New York has served as the trade association for the state's credit unions for 93 years. New York credit unions have assets of more than $50 billion and 4.4 million members.

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If you have any questions, or would like to speak with Mr. Mellin, please contact: Bonnie Sklar, Public Relations Coordinator, (800) 342-9835, ext. 8130 or Bonnie.Sklar@cuany.org

Posted Friday August 20, 2010 at 03:14 pm by Credit Union Association of New York
Last Updated Wednesday August 25, 2010 at 09:13 am