Senate Majority Leader Promises Floor Vote on MBL Legislation
U.S. Senate majority leader Harry Reid to Congress: “Democrats and Republicans are going to have to make a decision on where they stand for American credit unions.”
March 19, 2012
U.S. Senate majority leader Harry Reid, D-Nev., spoke Thursday in favor of legislation to increase the credit union member business lending (MBL) cap, promising a vote on the issue on the Senate floor.
Senate Bill 509 would more than double the capacity of credit unions to make small-business loans, raising the MBL cap from 12.25 percent of assets to 27.5 percent—a move credit unions say would increase their lending capacity by $10 billion.
“We’re going to have a vote on this,” Reid said from the Senate floor. “Democrats and Republicans are going to have to make a decision on where they stand for American credit unions.”
Reid has been working with Sen. Mark Udall, D-Colo., to attach the MBL bill to Senate Bill the Jumpstart Our Business Startups (JOBS) Act, but said the measure is not germane to the existing bill and therefore cannot be considered as part of the bill without unanimous senatorial consent.
Unanimous support is considered unlikely, due in large part to heavy opposition by banks to all efforts that would lead to raising or lifting the MBL cap. Reid acknowledged that the bill “presents problems for people, because a number of the banks don’t want this to happen. But I do,” he said, “and I’m going to do everything I can to have this brought before the Senate.”
Later that day, the American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA)—two groups that rarely cooperate on policy issues—issued a joint letter urging Senate leaders to continue restricting credit unions’ capacity to lend to small businesses, calling the MBL bill a potential perversion of the credit union tax exemption geared toward “growth obsessed, complex credit unions” looking to “use their tax subsidies to cherry-pick loans that tax-paying community banks willingly make in their communities.”
“It would contribute to the pressures that are forcing many community banks to re-examine their ability to remain independently viable,” the two groups wrote. “This would be a terrible result, not just for community banks but for the thousands of local communities they serve.”
Udall also spoke in favor of the bill, which he introduced on March 8, 2011, and called on his colleagues to look past industry arguments for the benefit of small-business owners and the American economy.
“It just makes sense to do this,” Udall said. “And I just can’t believe we’re going to let these squabbles between the banks and credit unions keep job creators from going to work in the small-small-business sector.”
No timetable was discussed, but Reid, who has also signed on as a sponsor of S.B. 509, indicated that he has taken the necessary first steps to bring the bill the floor as a stand-alone bill.
The discussion took place days before more than 4,000 credit union professionals, volunteers and advocates descended on Capitol Hill for the Credit Union National Association (CUNA) Governmental Affairs Conference (GAC). Legislative advocacy is traditionally the major focus of the GAC, with supplemental capital and the MBL cap the two primary issues currently at hand.
“Our opportunity is here,” said Northwest Credit Union Association (NWCUA) Vice President of Legislative Advocacy Jennifer Wagner, “and we need to do everything we can this week in D.C. and in the weeks ahead to make sure our senators understand the importance of this legislation to our communities’ small businesses.”
CUNA Vice President of Legislative Affairs Ryan Donovan echoed Wagner’s sentiments during Monday afternoon’s CUNA GAC general session.
“We’ll need 60 votes to get the Udall bill through the Senate,” Donovan said, “and your mission is to get those votes.”
Questions or Concerns? Contact Matt Halvorson, Anthem Editor: email@example.com.