Newsroom

August 22, 2011

Becker asks Obama to include MBL cap lift in jobs creation plan

NAFCU President Fred Becker asked President Obama on Monday to include an increase in the 12.25-percent-of-assets cap on credit union member business lending as part of the jobs creation plan – or any economic growth plan – he plans to advance this fall.

The president is expected to unveil an economic growth plan after Labor Day that will address jobs creation as well as deficit reduction achieved by a combination of spending cuts and tax code changes. Becker said an increase in the MBL cap, which unnecessarily hampers more credit union lending to small businesses, "will undoubtedly promote job creation and help stimulate the economy."

Becker noted the economy's and labor force's reliance on small businesses: Small businesses make up 99.7 percent of all employers, 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 past 10 years.

"Given those influences, raising the arbitrary restriction on credit unions' business lending ability is a common-sense and cost-effective way to ensure that creditworthy small businesses have the capital they need to help spur job creation," the NAFCU president said.

S. 509 and H.R. 1418, the Small Business Lending Enhancement Act, would allow an increase to 27.5 percent in eligible credit unions' MBL cap. The measures, which are identical, include criteria for safe growth in business lending and require NCUA to write implementing rules.

Becker pointed to a letter sent last year by Treasury Secretary Tim Geithner to then-House Financial Services Chairman Barney Frank, D-Mass., in which Geithner supported the approach taken in these two cap-lift measures.

Indeed, the president has said wants job creation measures that won't cost taxpayers. "Increasing the MBL cap for credit unions would allow them to supply much-needed capital to America's small businesses, all without costing the American taxpayer a cent," Becker wrote.