Washington Post: CUs reach out to small business

Feb. 9, 2010 – A Washington Post article today focuses on credit unions’ efforts to win more member business loan authority, touching specifically on such activity at Mid-Atlantic FCU (a NAFCU member in Germantown, Md.) and legislation in the House and Senate that would double credit unions’ current authority.

The article opens with a look at Mid-Atlantic Financial Partners, a subsidiary of the credit union that focuses especially on small-business lending in the community, and it cites examples of businesses that have gone there after being rejected by banks. It notes credit unions’ push for MBL authority and the fact that initiatives put forward thus far by the Obama administration for small businesses stop well short of that.

It also quotes the American Bankers Association’s stance that credit unions are ill-equipped and unlikely to provide much relief, but a response attributed to a former banker working with Mid-Atlantic today appears to dispute that. “Steven Smits, a local banker with long experience in lending to small businesses, joined [Mid-Atlantic] last year to help grow the operation,” the article states. “He said that as banks pulled back on small-business lending, he was attracted by a rare opportunity to keep making loans.”

It then quotes Smits noting, “There is an untapped resource, and it’s credit unions.”

The piece points to the bill (S. 2919) introduced by Sen. Mark Udall, D-Colo., and another in the House (H.R. 3380, introduced by Rep. Paul Kanjorski, D-Pa.) that would raise credit unions’ MBL cap to 25 percent of assets.

NAFCU continues to press the White House, Treasury and key members of Congress for just such an increase in credit unions’ MBL cap, noting the importance of helping small businesses during a time of tight liquidity and the fact that this approach would require no taxpayer funds.

It has pressed this case in connection with recent initiatives benefiting community banks working with the Small Business Administration, another focusing on community development financial institutions and a jobs bill now being crafted in the Senate.

For the article, follow the link below.