It’s Time for Congress to Act

For the almost five years that I have sat on the NCUA Board, national trade organizations, credit unions across the country and NCUA have tried to convince Congress to pass enabling legislation to increase the member business lending cap and provide all credit unions with access to supplemental capital. Despite extensive discussion and debate, Congress has yet to act on these matters.

Granted, this country has faced serious economic problems over the last five years that have required greater attention than the quests of credit unions for greater member business lending and another means to grow capital. But things are better now. Even though there are a number of pressing legislative issues before them, it’s time Congress got serious about and reached a consensus on these two critical issues. A consensus would enable credit unions to become stronger financial institutions, spur small business formation and growth, and help thousands of people across this country to get a job as a result of a credit union member business loan, or to join a credit union.

Small businesses all over the country are employing people and supporting families because of a member business loan provided by a credit union. At the end of last year, credit unions had $41.7 billion in member business loans outstanding.

Small business owners are what make this country great. Their hard work, initiative, drive to succeed and resilience are a large part of what makes our economy strong and dynamic. They are essential to getting our economy moving again.

What small businesses need are loans to get their ideas off the ground or to allow their businesses to grow and hire more people. Many more businesses can use the help those credit union loans provide, and would have access to if Congress increased the member business lending limit.

The Credit Union Small Business Job Creation Act of 2013 (H.R. 688) introduced in the House Representatives in February, and the Small Business Lending Enhancement Act of 2013 (S. 968) introduced in the Senate in May, would provide the much needed increase in the member business lending cap. In addition, the proposed legislation spells out strong criteria that credit unions, who are aggressive member business lending participants, must meet. With the passage of this legislation in its current form and with proper regulations in place, credit unions will be able to provide the much needed funding for small business expansion and improved economic growth. It’s time for Congress to act.

There is also proposed legislation on alternative capital sources. The Capital Access for Small Business and Jobs Act (H.R. 719), introduced in February, would permit credit unions to utilize uninsured, non-share accounts to supplement capital. In addition, the bill would stop an unfortunate practice that has become all too common—credit unions turning away deposits to protect their net worth ratios.

The legislation, as its currently written, also contains safeguards NCUA has requested to reduce the potential risks these new capital sources could pose to the National Credit Union Share Insurance Fund. Once again, it’s time for Congress to act.

Each year that passes without passage of legislation to improve how financial institutions can operate and benefit consumers is another year of disappointment. Congress must provide the tools that can help create new jobs, build new businesses, improve the financial futures of our citizens, and make credit unions stronger.

It’s time for Congress to act.