U.S. Senate Introduces Bill to Lift Business Lending Cap for Credit Unions:

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William J. Mellin, president/CEO, Credit Union Association of New York

ALBANY, NY (12/22/2009)(readMedia)-- In a 100 percent show of support for credit unions, Senator Mark Udall (D-CO) and lead introducing co-sponsors, Senator Charles Schumer (D-NY) and Senator Kirsten Gillibrand (D-NY), introduced legislation (S.2919) yesterday in the U.S. Senate that would lift the member business lending (MBL) cap for credit unions.

The proposed bill would raise credit union's current MBL cap to 25 percent of total assets. If passed, the increased cap would allow credit unions to make more small business loans, filling the still existent, small business lending void created by commercial banks and other financial entities on the heels of the subprime mortgage crisis. The legislative fix would come at a time when our country could well use an economic boost one that would not impact the size of government or its bottom line.

This spring, Senator Schumer took a leadership role on this issue, pledging action this session. Working with the Credit Union Association of New York, Senator Schumer kept the issue in the spotlight throughout 2009. The Association worked closely to secure the support of New York Senators, Schumer and Gillibrand, who both served as original co-sponsors of the proposed legislation.

"It's remarkable to have both of our New York senators, Schumer and Gillibrand, as original introducing co-sponsors of this key legislation that will help credit unions play a larger role in economic development and job creation," said William J. Mellin, president/CEO of the Credit Union Association of New York. "We applaud Senator Schumer's leadership and support of credit unions' work with small businesses throughout the session."

According to recent analysis by the Credit Union National Association, lifting the current MBL cap could create as many as 108,000 jobs and provide as much as $10 billion in credit to small businesses in the first year the bill is enacted.

Increased credit union business lending was part of a long list of possible job stimulus initiatives included in a joint U.S. Treasury-Small Business report that was submitted following President Obama's recent White House jobs summit. To date, the only opposition to lifting the MBL cap has come from the banking industry.

The proposed legislation is similar to House bill H.R. 3380, the Promoting Lending to America's Small Business Act, which amends the Federal Credit Union Act to advance the ability of credit unions to promote small business growth and development opportunities. The bill was originally introduced by Representative Paul Kanjorski (D-PA) in July of this year. It currently has 48 co-sponsors in the House.

The Credit Union Association of New York has served as the trade association for the state's credit unions for 92 years. New York credit unions have assets of more than $48 billion and 4.3 million members. To learn more about the Association, visit www.cuany.org.

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