Economy and Business
Mon December 3, 2012
Credit Unions Want More Leeway On Small Business Lending
Credit unions are asking the "lame duck" Congress to pass a bill that would allow them to increase the amount of small business loans they are legally able to make.
Representatives of the Wisconsin Credit Union League were in Washington DC last week, lobbying on behalf of a bill that would increase the amount of assets targeted at small business loans.
Brett Thompson is the president of the Wisconsin league. In 1998 a law was passed limiting the amount of credit unions' total assets that can go to small business loans. As it stands today credit unions can only loan out 12-and-a-quarter percent of their assets to small businesses.
"Once a credit union reaches that limit it can make no more loans regardless of how credit worthy the person who walks in the door is, how long they've been a member of the institution," he says. "They're capped and can make no more loans."
Thompson says credit unions are asking for the limit to be doubled--to 27 and a half percent of assets.
"Prior to 1998 there was no limit," he says. "This would only extend the limit to 27 and a half percent of their assets."
Thompson says he is optimistic that congress will act on the bill even though most financial attention is directed at the "fiscal cliff."