The banks are at it again: Putting their interests ahead of those of consumers and small business owners.
When Congress finally broke for its summer home-district work period this week, banks had not budged from stubbornly blocking a commonsense approach for creating more jobs: legislation that would give credit unions more authority to make business loans.
Never mind that improved business lending potential for credit unions would create more than 100,000 new jobs, and inject $10 billion into the economy, both at NO cost to taxpayers: The bankers are doing whatever they can to hold back this legislation.
You have to wonder what the bankers are thinking, especially since just last week the government reported the nation shed more than 130,000 jobs in July -- adding to the concern that more needs to be done to prevent the economic recovery from stalling.
Giving credit unions more business lending strength could be one key part of the response. Credit unions need the ability to raise their lending capacity to as much as 27.5 percent of assets, as proposed in legislation pending in Congress. Right now, credit unions are capped at 12.25 percent -- and while they have the money to lend, they're bumping up against that lower cap.
There is no public policy reason not to permit credit unions to do more lending to their members who own or want to start small-businesses. In fact, credit unions have proven for years they are capable of making these types of loans safely and soundly. During this "Great Recession," while bank business lending contracted, credit union business lending expanded.
Yet, the only ones who oppose expanding credit union business lending are banks -- and they are thwarting its consideration.
Unless Congress grants its permission, credit union business lending will have to slow down -- and that does nothing to help struggling small firms.
Credit unions were authorized under federal law more than 75 years ago in the crucible of the Great Depression. While our country today searches for solutions to boost the economy -- chiefly, by creating jobs -- now is when Congress ought to ignore the banks and turn again to credit unions, as a tool for helping small business.
If you own a small business, or if you want to start one, and you agree that credit unions should have more capacity to help you, call your senator and urge him or her to support Sen. Mark Udall's amendment to H.R. 5297, the Small Business Job and Credit Act of 2010.
Tell Congress to finish the job, frustrate the bankers -- and give credit unions the power to create more jobs for America.
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