AmeriCU Credit Union Requests Member Help with Small Business Lending Enhancement Act
April 11, 2012
Mark Pfisterer, President and CEO of AmeriCU Credit Union, requests members to help send a message to New York State legislators, in support of the U.S. Senate, to pass the Small Business Lending Enhancement Act. Mr. Pfisterer thanks Senators Charles Schumer and Kirsten Gillibrand for their continued support of this legislation and credit union movement.
If the U.S. and local economies are to recover, businesses need better access to capital to fund expansion, hire workers, and invest in new equipment. A 2011 study conducted by Pepperdine University revealed that 54% of businesses surveyed with gross receipts under $1million planned to access capital in 2011. However, only 36% of those businesses were successful in securing a bank loan. Unfortunately, many small business owners who can readily demonstrate good cash flow and credit often lack the collateral necessary for banks to approve traditional loans at reasonable interest rates – if at all.
Credit unions increased overall business lending by 4% in the 12 months ending June 2011, as bank business lending declined by 1.8%. Credit unions provided $12.6 billion in lending to 300,000 small businesses during Q1-Q3 2011, up 71% from 2010. However, that growth is being constrained by federal limitations capping Member Business Loans to 12.25% of total credit union assets. These limitations (imposed by the Credit Union Membership Access Act of 1998), stifle credit unions’ ability to service loans to small businesses.
The U.S. credit union system was designed to provide financial services to individuals and entities of modest means and support the development of local communities. Though exemptions exist for certain types of lending, credit unions are approaching a point at which they will begin turning micro-businesses away – to the detriment of our communities and our economy.
Recently, credit unions have sought legislation to increase the availability of capital to small member businesses currently restricted by federal statute. Sen. Mark Udall, D-Colo., introduced bipartisan bill S. 2231 entitled The Small Business Lending Enhancement Act (identical to S. 509), which seeks to get the federal government out of the way of job creation and help improve small businesses' access to capital by increasing the cap on credit union lending from 12.25% to 27.5% of assets. This bill, which is both co-sponsored and supported in New York by both Senator Charles Schumer and Senator Kirsten Gillibrand, is projected to create more than 100,000 jobs in the first year alone without costing taxpayers anything; however, special interests and their allies have prevented it from receiving the up-or-down vote it deserves. The bill is currently on the Senate’s calendar of general orders, which means that it can be brought to the floor for consideration at any time.
The vote is scheduled for the Small Business Lending Enhancement Act for April 16th, 2012. Access the Credit Union Association of New York’s Grassroots Action center to support the Small Business Lending Enhancement Act at: http://capwiz.com/cuna/issues/alert/alertid=60924641&PROCESS=Take+Action.
AmeriCU Credit Union is a not-for-profit financial cooperative serving eight counties in Central and Northern New York. AmeriCU Credit Union is located in central New York and is among New York State’s largest fullservice financial cooperatives. The organization has built relationships with members since 1950 and currently serves more than 118,000 members world-wide through its remote contact center and its 15 fullservice financial center locations. In addition to its full offering of traditional personal and commercial banking services, AmeriCU provides investment, insurance and financial planning services and consultation.
231 Hill Road
Rome, NY 13441
Phone (315) 356-3000
Phone: (315) 356-3121
Fax: (315) 356-3362