Suppose you were a member of Congress considering best ways to hasten the economic recovery, and there were two groups talking in your ear about what to do.
Would you listen to the first group, which represents credit unions -- consumer-owned, democratically controlled, not for profit financial institutions -- which have a plan to help small business spur the economic recovery, with more than $13 billion in new loans, creating 140,000 jobs in the process?
Or would you listen to the second group, which represents banks -- the same industry that abandoned the small business community during the financial crisis, a product itself of the misdeeds of the for-profit financial services sector? This group offers no plan, but demands that Congress doesn't give credit unions anything.
Is this a no brainer?
Yes, for many in Congress: They are listening and they get it.
But, surprisingly, some others just won't or can't listen -- or have trouble making up their minds.
Unfortunately, many of those are likely confused by the banks' bombast. Their top lobbyist, Frank Keating (president of the American Bankers Association), says that as they try to address the federal budget deficit, it would be "unconscionable" for Congress to add to it by giving more power to credit unions.
Unconscionable? Really? In what universe is it reasonable, moral or commendable to listen to -- and act on the recommendations of -- an industry that offers roadblocks, rather than solutions, to getting our economy back on track?
And this from an Association that represents institutions requiring billions of dollars in taxpayer bailout assistance.
And yet that's where things stand.
Credit unions want to help small business help the economic recovery -- and they can, especially if Congress modernizes the law, gives them more authority to make business loans to their members, and help inject billions in the economy, creating hundreds of thousands of jobs -- all at no cost to taxpayers.
The fact is, small business -- which most agree is the lodestone for greater employment and faster economic recovery -- needs greater access to credit. Some examples of the evidence:
• Surveys indicate that nearly one-quarter of small business owners sought a bank loan in the last year and fully 57 percent indicated that they were not successful in obtaining financing -- a clear indication that a substantial number of small businesses continue to need more access to capital.
• Polling revealed that 90 percent of small business owners believe that the availability of small business loans is a problem; 60 percent have faced difficulty trying to obtain loans that would grow their small business -- and 90 percent of small business owners support making it easier for community banks and credit unions to make loans to small businesses.
• Data from financial institution regulatory reports suggest that banks -- both large and small -- are turning away many business borrowers, with loans outstanding declining by -2.0 percent last year. At the same time, credit union business loans increased by 5.1 percent. And total bank business loan portfolios declined over the cycle, while credit union business loan portfolios grew at a healthy rate.
But, what's also true is that credit union business lending growth has slowed recently as an increasing number of credit unions have begun to approach the outdated cap on their business lending. Our association represents nearly 90 percent of the credit unions in this country, and they are emphatic in saying Congress must act, right away.
In the next few weeks, credit unions will be engrossed in helping a few more members of Congress, particularly in the Senate, make up their minds about credit union business lending. Credit unions will be urging them to support S.2231, the Credit Union Small Business Jobs act.
Sound like a no brainer? Join the credit unions in support -- especially if you are a small business owner. Urge your senators to listen to the credit unions -- the ones with the plan for helping small business and our nation's economic recovery.
And ignore the ones offering nothing but roadblocks and no solutions.