Bonamici, Haaland, Young Call on House Leadership to Lift Barriers for Credit Unions, Help Small Businesses
WASHINGTON, DC [04/16/20] – Today Representatives Suzanne Bonamici (OR-01), Deb Haaland (NM-01), and Don Young (AK-At Large) led 62 of their colleagues in calling on House leadership to remove restrictions on credit unions that prevent them from fully serving small businesses in their communities during the COVID-19 pandemic.
The bipartisan group of members requested that the next coronavirus response package increase the arbitrary cap that prevents credit unions from lending to more of their small business members. Currently, a member business loan (MBL) cap restricts credit union business lending to12.25 percent of assets.
“Small businesses and communities around the country are suffering and need access to relief quickly,” the Members wrote. “As you continue your work to provide funding and resources to our small businesses, we encourage you to remove longstanding barriers that prevent credit unions from fully serving their communities… Increasing the cap, or removing it entirely, comes at no direct cost to the taxpayer and would allow local credit unions to effectively and efficiently unleash more capital to provide more loans to their small business members.”
The effort is supported by credit unions in Oregon and across the country.
“This letter will ensure that credit unions can be there for small businesses looking to get back to work helping Main Street communities quickly recover from this unprecedented crisis,” said Jim Nussle, President/CEO of the Credit Union National Association. “We thank Reps. Bonamici, Haaland and Young for their leadership in this crucial bipartisan effort.”
“We thank Representatives Suzanne Bonamici, Deb Haaland, and Don Young for working with NAFCU and our members and leading the effort to increase the member business lending cap to allow credit unions to provide more assistance to small businesses and communities in need,” said Dan Berger, National Association of Federally-Insured Credit Unions President and CEO. “This strong showing of support from so many members of Congress is a testament to the need for additional help for small businesses that credit unions stand ready to provide if arbitrary and outdated limitations on their ability to do so are lifted.”
“Congresswoman Bonamici has been a leading voice for credit unions and the important role they play in providing capital to small businesses since her first day in office,” said Jennifer Wagner, EVP & Chief Advocacy Officer, Northwest Credit Union Association. “We appreciate her tireless efforts, especially amidst the current crisis, knowing the families and communities here in Oregon that will benefit from this change.”
The full text of the letter can be here and found below. In addition to Bonamici, Young, and Haaland the letter was signed by: Representatives Pete Aguilar, Nanette Diaz Barragán, Ami Bera, M.D., Earl Blumenauer, Anthony G. Brown, Julia Brownley, Ken Calvert, André Carson, Ed Case, Kathy Castor, Joaquin Castro, Judy Chu, David N. Cicilline, Gilbert R. Cisneros, Jr., Steve Cohen, Gerald E. Connolly, Paul Cook, J. Luis Correa, Angie Craig, Jason Crow, Henry Cuellar, Peter A. DeFazio, Rosa DeLauro, Anna G. Eshoo, Brian Fitzpatrick, Lizzie Fletcher, Bill Foster, Tulsi Gabbard, John Garamendi, Vicente Gonzalez, Jared Huffman, Sheila Jackson Lee, Marcy Kaptur, John B. Larson, Barbara Lee, Susie Lee, Andy Levin, Alan Lowenthal, Carolyn B. Maloney, Gregory F. Murphy, M.D., Stephanie Murphy, , Grace F. Napolitano, Joe Neguse, Eleanor Holmes Norton, Scott Peters, Katie Porter, Jamie Raskin, Tom Reed, Raul Ruiz, M.D., Linda T. Sanchez, Adam B. Schiff, Kurt Schrader, Brad Sherman, Darren Soto, Jackie Speier, Eric Swalwell, Bennie G. Thompson, Mike Thompson, Dina Titus, Rashida Tlaib, Frederica S. Wilson, and Rob Woodall.
April 16, 2020
The Honorable Nancy Pelosi The Honorable Kevin McCarthy
Speaker of the House Minority Leader
U.S. House of Representatives U.S. House of Representatives
Washington, D.C. 20515 Washington, D.C. 20515
Dear Speaker Pelosi and Leader McCarthy,
Small businesses and communities around the country are suffering and need access to relief quickly. As you continue your work to provide funding and resources to our small businesses, we encourage you to remove longstanding barriers that prevent credit unions from fully serving their communities.
Thanks to your leadership, Congress passed H.R. 748, the Coronavirus Aid, Relief, and Economic Security (CARES) Act swiftly, and the Small Business Administration and financial institutions are working at a rapid pace to get resources to small businesses and communities. Credit unions across the country are working to provide loans pursuant to the CARES Act programming, but longstanding barriers prevent them from providing a full range of financial support to their small business members.
As we consider pandemic responses, Congress should increase the arbitrary cap that prevents credit unions from lending to more of their small business members. Currently, credit unions are limited to an MBL cap of 12.25 percent of assets. Increasing the cap, or removing it entirely, comes at no direct cost to the taxpayer and would allow local credit unions to effectively and efficiently unleash more capital to provide more loans to their small business members.
Furthermore, the current threshold of what qualifies as a business loan is $50,000, an amount that has not increased since its inception in 1998, and has not been adjusted for inflation. Any lines of credit or loans to small businesses above this threshold count toward the MBL cap and are subject to additional MBL requirements. In the last twenty years the cost of doing business has increased significantly, and small businesses need access to larger lines of credit for their business needs. Increasing this threshold for the amount that qualifies as a business loan would give credit unions the flexibility they need to offer additional resources and relief to small and micro businesses, especially as those small businesses try to survive during the recovery ahead.
By raising the existing cap on total percentage of assets dedicated to MBLs, and by increasing the monetary threshold of what is considered as a business loan, Congress could immediately expand the resources available to our local communities and small businesses - at no cost to the taxpayer. This is a common sense step to take in any pandemic relief bill.
Our credit unions are working tirelessly through this crisis to provide services to their members. They are leaders in their local communities and are well-positioned to help small businesses weather this pandemic and economic downturn. As you work on the next coronavirus response package to support our communities and protect our economy, we encourage you to consider these important relief measures that will help save small businesses across the country.
Thank you for your consideration of our request.