Member Business Lending Petition


The credit unions’ top legislative priority in 2012 is to enact the deceptively-named Small Business Lending Enhancement Act (H.R. 1418/S. 2231) which would more than double the statutory member business lending cap for credit unions from 12.25% to 27.5% of total assets. Long subsidized by taxpayers due to their tax exemption, the credit unions’ continued pursuit of expanded business lending powers calls into question the industry's commitment to serving the needs of its primary constituencies: individuals of modest means and those with a common or geographical bond. This legislation would create unnecessary risk in the financial system, exacerbate the competitive advantage credit unions enjoy over community banks, and widen budget deficits at the federal, state and local levels. ICBA strongly opposes it.

Unnecessary Legislation. The arguments put forth by the credit unions for drastically increased business lending capability are spurious and misleading. The industry says that raising the cap is vital for job growth, yet less than 1% of all credit unions nationwide are estimated to be at or even close to the current cap. Notably, fully 70% of credit unions do not report business lending activity of any kind. There is ample capacity for credit unions to increase their member business lending even under the current cap since any business loan of $50,000 or less and all SBA business loans are not subject to any cap. Doubling the member business lending cap would only allow the largest, multi-billion dollar credit unions to expand into the now-prohibited commercial lending levels while still benefiting from tax-exempt status.

Too Costly for Taxpayers. Credit union lending comes at a cost to taxpayers. The unnecessary expansion of business lending by tax-exempt credit unions would siphon away lending from taxpaying institutions like community banks, in turn reducing tax revenue to struggling federal, state, and local governments. At a time when governments of all sizes are desperate for revenues from any source, further reducing those revenues in the interest of the largest, multi-billion dollar credit unions would be extremely irresponsible. According to the independent Tax Foundation, the credit union tax subsidy already exceeds $3 billion per year. Allowing the largest tax-exempt mega-credit unions to unnecessarily expand at the expense of tax-paying institutions like community banks is counterproductive and would exacerbate already strained budget deficits that threaten our future prosperity.

Stand united with all taxpaying community banks and ICBA in opposing any attempt to raise the member business lending cap for credit unions and their unwarranted power grab. Please sign below to add your name to the growing number of community banking allies who oppose S. 2231 and H.R. 1418.

Sign our Petition!