Credit unions press for increase in business lending cap

NAFCU has been pressing congressional leaders for the increase since January 2010 to help small businesses regain credit lost from other lenders.

The group has said that while some credit unions are approaching or at the cap, others havent fully developed their business lending programs because of the 12.25 percent cap of total assets on business lending for its member credit unions.

As you are aware, our nation’s small businesses represent 99.7 percent of all employer firms, employ half of all private sector employees, pay more than 45 percent of total U.S. private payroll, and have generated 60 [percent] to 80 percent of net new jobs annually over the last decade, the NAFCU wrote to Obama.


NAFCU therefore believes that the strength of the economy and labor force is strongly influenced by the health and well-being of the small business community.

Legislation is pending in both chambers of Congress that would increase the cap, and therefore help take an important step in the recovery of the small business community and the overall economy.

In March, Sen. Mark UdallMark Emery UdallDemocratic presidential race comes into sharp focus Democrats will win back the Senate majority in 2020, all thanks to President Trump Poll: Trump trails three Democrats by 10 points in Colorado MORE (D-Colo.) introduced bipartisan legislation that would lift the arbitrary member business lending cap from 12.25 percent to 27.5 percent of total assets. 

In April, Reps. Ed Royce (R-Calif.) and Carolyn McCarthyCarolyn McCarthyWhy Congress needs an openly atheist member, now Lobbying World Lobbying world MORE (D-N.Y.) introduced identical legislation in the House.

Credit unions would have to meet certain criteria to be deemed eligible, such as having at least five years of member business lending experience, being at or above 80 percent of the current 12.25 percent cap for at least one year prior to applying, being considered well-capitalized and able to demonstrate sound underwriting and servicing based on historical performance and possessing strong leadership management.