Washington Credit Union Business Lending Skyrockets 13 Percent


September 18, 2012

David Bennett
425.221.1237 (mobile)

Washington Credit Union Business Lending Skyrockets 13 Percent

Small businesses are turning to Washington credit unions for their financing more than ever before, according to data just released by the National Credit Union Administration (NCUA).

The state’s financial cooperatives have lent more than $1.5 billion to their business-owning members as of June 31, 2012. This marks a quarter-over-quarter increase of 2.8 percent, more than double the 1.2 percent increase credit unions nationwide experienced during 2012’s second quarter, according to the NCUA.

Over the past 12 months, Washington’s 47 credit unions with business lending programs have infused more than $175.8 million into the state’s slowly recovering small-business economy, a year-over-year increase of 13.1 percent. Credit unions of Washington now rank sixth in the nation for total dollar value of outstanding member business loans (MBL) behind California ($7.4 billion), New York ($4.9 billion), Wisconsin ($2.4 billion), Texas ($2.1 billion), and Indiana ($1.6 billion). Nationally, credit unions have more than $40.2 billion lent in total MBLs.

“Credit unions in the Northwest and nationwide are filling an important societal need left when banks began exiting the business lending market after 2008, when business lending at banks reached a peak,” said Northwest Credit Union Association (NWCUA) CEO John Annaloro. “The divergent tracks of the for-profit versus not-for-profit banking sectors in this market in some ways have become less of a balance sheet issue and more of a patriotism issue.”

According to a report by the Small Business Administration entitled, “The Increasing Importance of Credit Unions in Small Business Lending,” this divergent course in business lending from the two banking sectors has been apparent, although subdued, since the 1980s, when credit unions began devoting increasingly important shares of their assets to MBLs.

Despite the need for more business lending, banks instead are buying U.S. Treasuries and have increased their holding to an all-time high of $1.84 trillion. According to Federal Reserve data, banks have purchased $136.4 billion in T-Bills and government debt so far in 2012—more than double the $62.6 billion purchased in all of 2011.

As banks continue to ignore the business banking market, credit unions continue to work to increase the availability of financing options for small businesses. Credit union business lending is presently limited to 12.25 percent of the lending credit union’s assets, but a bill currently before Congress seeks to raise the MBL cap to 27.5 percent. Senate Majority Leader Harry Reid (D-Nev.) promised in March that the bill would receive a floor vote in the Senate before the end of the year.

According to the Credit Union National Association (CUNA), that single move would inject an additional $13 billion into the small-business economy and create an estimated 140,000 new jobs in the first year—all at no cost to taxpayers.

Additional MBL Facts and Resources

  • Credit unions have been lending to small businesses for more than 100 years;
  • More than 500 credit unions will be at or near the MBL cap in less than three years, and the low current cap of 12.25 percent of assets means that two-thirds of credit unions, most of which hold less than $50 million in assets, cannot justify the cost of investing in new business lending programs;
  • The average credit union business loan is $219,000; and
  • MBL cap increase legislation is not, in fact, “controversial,” but has been introduced in each of the last four Congresses.

Small Business Loans per Assets CUs vs Banks 1994-2010


The Northwest Credit Union Association is the not-for-profit trade association serving 168 credit unions in Oregon and Washington and their 4.25 million members. The NWCUA is the voice of the Northwest credit union movement, providing legislative, regulatory and public advocacy in addition to education, compliance, networking support and business solutions to its members. Learn more about credit unions at http://www.asmarterchoice.org.

Click to download the press release.

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