The Pewaukee-based Wisconsin Credit Union League is bemoaning the lack of action on a proposed amendment to the Small Business Lending Act, which would raise the cap on commercial lending that credit unions may issue. Under current law, credit unions can only lend 12.25 percent of their assets to commercial clients.
The proposed amendment, authored by Sen. Mark Udall, (Dem., Colo.) would increase that cap to 27.5 percent.
The Credit Union League says big banks have threatened to oppose the bill.
It also reports that Wisconsin’s credit unions increased commercial lending by 11 percent from March 2009 to March 2010. The average loan amount is about $175,000.
"Banks have admitted they are unlikely to increase their business lending because of regulatory pressure that has forced them to restrict their lending," said Brett Thompson, President & CEO of The Wisconsin Credit Union League. "So, knowing full well they’re not going to step up to help, it’s ill-conceived that Congress would allow banks to block a credit union provision that could preserve jobs and get Wisconsin firms moving again."
Rose Osweld Poels, senior vice president and counsel of the Wisconsin Bankers Association, disagreed.
“Raising the current cap on credit unions’ business lending is an action which would benefit only half of one percent of all credit unions in the nation,” she said. “This issue is being promoted by the largest, profit-driven credit unions, those who have strayed the furthest from their mandated mission of serving those of low and modest means for which they enjoy a tax exemption that potentially costs Wisconsin taxpayers $40 million a year, as they are the only entities near their lending cap. Wisconsin credit unions also have the option, which several have taken advantage of, to petition for an expansion of their lending capacity if they are nearing their cap. Allowing aggressive, profit-driven credit unions an increased lending cap would take business loans away from taxpaying entities in a time when Wisconsin needs every tax dollar it can get.”