Becker hits plan for excluding CU MBLs

Feb. 3, 2010 – NAFCU President Fred Becker on Tuesday noted extreme disappointment with the administration’s continued failure to recognize credit unions as part of the solution to the challenges facing America’s small businesses.

Yesterday, the president released additional details of his proposal to take $30 billion from the Troubled Assets Relief Program to promote small-business lending by community banks. The money would be moved to the Small Business Administration, which would use it to provide capital to small and community banks. The hope is that they will use these funds to support more small business lending.

All credit unions want, Becker said, is more member business lending authority, which involves no TARP money and would cost the taxpayer nothing. “While we appreciate the administration’s continued attempt to jump-start lending to small businesses, we are extremely disappointed that credit unions continue to be ignored as part of the solution,” Becker wrote in a letter to the president that was copied to Treasury Secretary Tim Geithner and SBA Administrator Karen Mills.

Becker reminded that 700 regional and community banks have already taken huge amounts of TARP bailout funds while credit unions have not.

Banking trades have indicated a lack of interest in the president’s proposal, which would require congressional action to move the $30 billion in TARP money to the SBA for banks. Becker said the proposal could undermine the stabilizing force provided by credit unions, which remain subject to a 12.25 percent-of-assets limit on MBL activity.