Inside the CUNA GAC: STCU Business Members Urge Support of Bill to Raise Lending Cap
March 29, 2012
March 29, 2012
By Dan Hansen, STCU senior communications officer
Last week, Spokane Teachers Credit Union (STCU) President and CEO Tom Johnson hand-delivered five persuasive letters from STCU member businesses to U.S. Rep. Cathy McMorris Rodgers, R-Wash., urging her to support legislation allowing credit unions to do more business lending.
“We applied for loan after loan to finance (a business expansion) project and were continuously turned down by banks,” the vice president of one business wrote in her letter to the congresswoman. “(STCU) was the only financial institution that was willing to help.”
“Because of (STCU’s) help, we were able to keep our entire staff and not worry about layoffs,” wrote the owners of a preschool.
Johnson was among 4,000 credit union supporters from across the country who gathered in the nation’s capital for the annual Credit Union National Association (CUNA) Governmental Affairs Conference (GAC). He was joined by five STCU board members and three staff members, including two attending on scholarships from national and regional credit union groups.
Their top priority: urging support for Senate Bill 2231, which would raise the cap on member business lending (MBL) from 12.25 percent of a credit union’s total assets to 27.5 percent. At a time when banks are cutting back on small-business lending, passing the bill would give employers access to an additional $13 billion of capital—enough to create an estimated 140,000 new jobs. Without it, many credit unions will have to stop making business loans. Some already have.
“This is a bipartisan way to help our small businesses without costing a dime to taxpayers,” Sen. Mark Udall, D-Colo., told a cheering audience at the conference. “We’re going to get government out of the way so that you can do what you do best and get the economy moving.”
But Udall’s bill faces intense opposition from banks, including some that took taxpayer bailouts. The same day that lawmakers from both parties were pledging their support at the CUNA conference, two bank groups sent fliers to every member of Congress suggesting that if credit unions want to expand their business lending, they should “give up their huge taxpayer subsidy” and become banks. Even though for-profit banks control 94 percent of the lending market, they accused credit unions of attempting a “power grab” based on “half lies.”
The bankers’ heavy-handed tactics appeared to backfire. Senate Majority Leader Harry Reid, D-Nev., this week took steps to move the Udall bill out of the committee where it had been expected to die. That clears the way for a Senate vote later this spring, a huge step that’s been years in the making.
With so much at stake, credit union supporters piled onto Washington D.C.’s underground trains to converge on the capitol for meetings with their senators and representatives. More than 50 people from across the state of Washington applauded when Democratic Sens. Maria Cantwell and Patty Murray promised “yes” votes on the Udall bill, while holding open the possibility that the final cap may fall a bit lower than the 27.5 percent sought by credit unions.
Cantwell said she’s grown wary of banks after hearing from many small businesses in need of loans and learning that some banks used federal money intended to stimulate the economy to instead pay back their TARP bailouts. She compared the potential impact of the Udall bill to “letting 1,000 flowers bloom.”
By increasing business lending, credit unions “can provide a lot of seeds to a lot of people,” said Cantwell. “That’s what I want for communities. It’s what the country needs.”
Added Murray, “You don’t have to convince me. I go home and your (members) come up to me in the store and tell me the good work you’re doing.”
Of course, the Senate is only half the challenge. Any legislation must also work its way through the House of Representatives, where legislation identical to the Udall bill has a long list of co-sponsors from both major political parties. Missing from that list is Rep. McMorris Rodgers, who represents Eastern Washington.
McMorris Rodgers told the credit union group from her home district that “my sympathies right now are with community and independent bankers,” who tell her that raising the credit union lending cap would cause them harm. “I’m worried about their survival over the next few years,” she said.
Yet, there are other businesses trying to survive, as well. And they are represented by the letters Johnson provided the Congresswoman, thanks to the efforts of STCU Business Services. In the week leading up to the CUNA GAC, five business owners enthusiastically said “yes” to our request that they write letters urging McMorris Rodgers to support the Udall bill.
Letters in hand, the Congresswoman noticed that the one on top came from a well-known Spokane businesswoman who employs 80 people. The current lending cap “means that businesses have fewer options for getting the money they need for expansions (that are) good for business,” wrote the STCU member.
McMorris Rodgers agreed to meet with the credit union folks—and some of STCU’s member businesses—sometime when she’s home in Spokane.
“I want to spend more time with this issue,” she said.
To the credit union representatives who had crossed the country to meet with her, that assurance was a victory. With a sense of optimism, they stepped out of the Congresswoman’s office into a marble hallway where generations of Americans have come to build better communities and a stronger country.
“We’ve done some good here,” Johnson said.
Questions? Contact a member of the Association’s Legislative Affairs team:
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