MBL Update: Advocates Urge Lame-Duck Congress to Support S. 2231

Credit union advocates from around the nation are in Washington, D.C., this week to urge a lame-duck Congress to support S. 2231, a bill that would more than double credit unions’ capacity to issue member business loans (MBLs). The bill is not expected to receive a vote on the Senate floor this week, but reports from the Credit Union National Association (CUNA) indicate that the bill is still receiving strong support, attention and consideration.

Credit unions are currently limited by an arbitrary MBL cap of 12.25 percent of assets, and S. 2231 would raise that cap to 27.5 percent, freeing up the credit union movement to lend significantly more money to small businesses and fill a void left by the for-profit banking industry.

Senate Majority Leader Harry Reid (D-Nev.) pledged in March to hold a vote on the bill, which was drafted by Sen. Mark Udall (D-Colo.), has 21 co-sponsors in the Senate and will require 60 votes to pass. A companion bill in the House, H.R. 1418, has earned widespread support as well.

“We expect Sen. Reid to call the MBL bill to the Senate floor for a vote soon, and we are on the ground in D.C. making a strong push for support,” said Northwest Credit Union Association (NWCUA) Vice President of Legislative Advocacy Jennifer Wagner, who traveled to Capitol Hill today with a small group of Northwest credit union advocates. “Make no mistake, there is also a presence on the Hill opposing this bill as strongly as we are supporting it. We will continue to share the credit union difference with our legislators until our bill receives a vote, and we are confident that we will have the support we need when that time comes.”

The Northwest contingent is part of a group of more than 500 representatives from credit unions and small business expected in Washington, D.C., this week to take part in a CUNA-sponsored fly-in to make another push for support from legislators. The banks, meanwhile, have sent lobbyists of their own for a coordinated effort opposing the bill.

According to CUNA Executive Vice President John Magill, the banks’ attempts to suppress the bill are “not surprising, but it is disappointing—especially given their treatment of small businesses, which have been struggling to obtain bank credit the last five years. This bill helps small businesses, and it helps the economy at no cost to the taxpayer. We don’t need the banks’ blessing on this. They don’t control the U.S. Congress.”

“We continue to meet with and discuss this matter with staff and Senators, and this situation could change,” CUNA President and CEO Bill Cheney wrote in an email. “As part of our efforts, we continue to explore the possibility of combining MBLs with the bankers’ TAG extension. However, we are preparing for a vote—and we need one final push.”

The NWCUA has sponsored a major media campaign this week as well, placing online and print advertisements in Portland and Salem, Ore., and in Seattle and Spokane, Wash. The latest CUNA calculations project 7,000 new jobs in Washington and 2,500 in Oregon in the first year alone—at no cost to taxpayers. The ads call consumers to action, asking them to contact their legislators and ask for support of S. 2231.

“Raising the credit union MBL cap is a simple, common-sense move that Congress can make to help small businesses grow and create new jobs. This is an opportunity for our legislators to put America on a path to quicker economic recovery by freeing up not-for-profit credit unions to safely and responsibly make much-needed loans to the businesses that need them most. The flow of business during a lame-duck Congressional session can be unpredictable at times, and while the path to successful passage of our legislation is subject to change, our grassroots efforts cannot let up—especially not now.”

Old West Federal Credit Union Members Tell Their MBL Stories

Many credit union advocates are joined on the Hill this week by small-business owners who have benefited from a credit union MBL, and many more have found creative ways to engage their business-owning members in advocacy efforts. Old West Federal Credit Union in John Day, Ore., submitted a stable of letters from members that tell the story of their business’ growth, explain the benefits of their relationships with Old West, and ask Oregon Sens. Ron Wyden and Jeff Merkley to fight for the MBL cap increase. A few highlights from the letters include:

  • From Greg Larson, owner of Pacific Pine Products, Inc.: “Conventional banking proved to be unavailable to us during the recent downturn. Because of the support of Old West Federal Credit Union, we continue to be in business today, employing 75 people in Lake County, Oregon. We are the largest private employer in the county.”
  • From Ken Errend of Intermountain Mortgage: “Our credit union’s involvement as a source of funding has been crucial to our success and to our ability to provide a source of credit to farmers and ranchers in eastern Oregon, western Idaho and northern Nevada. We have been filling a niche for these real estate loans for over 16 years. If not for the relationship with our local credit union, we could have never got off the ground. We spent months contacting several banks in the region to establish relationships to generate Farmer Mac loans. We were unsuccessful in our endeavor. Fortunately, our credit union embraced our business plan. Today, we have served approximately 370 farmers and ranchers in this area with their long-term financial needs. Many were denied by local banks. Without the assistance from the credit union, we would have been unable to provide this valuable service.”
  • From Don Moss, owner of Don Moss Enterprises: “There have been many occasions that our local credit union, Old West Federal Credit Union, has been a valuable financial asset to my contracting operation. By providing operating capital and financing of equipment, this credit union has been a major factor in the success of my business, rather than failure during this country’s time of financial trouble and recession.”
  • From Lee and David Manuel, owners of Hot Lake Springs: “In late 2003, our family embarked on a huge project with potential to have great economic impact on our entire community. Much to our surprise, grants and funding became the impossible dream. Twelve times, conventional banks offered funding, and nine of those, we were told, ‘It is a done deal. You are funded. Make plans accordingly.’ Disappointment was devastating, as people in the last seat of decision who had never stepped foot on the project would rescind the funding commitment; soon mistrust was established. At last, Old West Federal Credit Union became interested and creative enough to make it happen. These are the kind of people the country’s businesses have ben found on; people who say what they mean and mean what they say. I shutter to think how our story would have ended without them.”
  • From David and Diana Ricker, owners of Primos Pizza: “As the economy was crashing in 2007-2008, we were well underway to begin a new business, Primos, a pizza buffet which created 12-15 new jobs. After pursuing financing at other commercial banks in the area and running into a dead end, we sat down with Old West Federal Credit Union, which helped us to finance the business we continue to operate today.”
  • From Brian Wright of Wright Farms, LLC: “The money that we have been able to borow from our credit union has been instrumental in the survival and growth of our family farm.”
  • From Cecil and Nancy Swaggart, whose logging business was forced to undergo a drastic change: “This is a very tough economy to do business in today, with high energy and wage costs. Our experience is this… without the credit union, we would not be in business today, and many, if not all, of our local businesses have had the same experience.”
  • From Zachary Williams of A Bar L Ranch: “As young people trying to get started in our own business, we have been held back by the business lending caps on credit unions. In our case, Old West Federal Credit Union was the only bank which would help us, but they were limited by the lending caps and this hurt our ability to expand.”
  • From King Williams, president of King, Inc.: “We were turned down for loans by the commercial lenders in our area for operating loans and equipment purchases to expand our business. However, our credit union was able to make the loans and help keep our business open. We have been in business since 1998. The only problems we have had with lending through our credit union is the arbitrary business lending caps which limit growth potential.”
  • From Mike Smith of Gazelle Land & Timber LLC: “Gazelle Land & Timber LLC has been in business since 2000, and we have borrowed and paid back millions of dollars in the course of doing business. Being in the timber industry, we require large loans at various times in our operations, and Old West Federal Credit Union was the only bank in town which would work with us. We have only been limited by the arbitrary lending caps imposed upon credit unions for business lending. This is extremely unfair and anti-business in our rural communities.”
  • From Phil Gray of Blue Mountain Broadcasting Co., Inc.: “We purchased KJDY in John Day in 1987. Since we didn’t have a track record, banks would have nothing to do with us. Only Old West Federal Credit Union had the faith in us to help make our dream of owning a radio station become a reality.”

The best way to vocalize support for the bill is to call your Senators at 202.224.3121 and encourage them to vote for S. 2231, the Credit Union Small-Business Jobs Act.

Anthem will continue to report on the progress of the MBL bill as it unfolds.


Questions? Contact a member of the Association’s Legislative Affairs team:

Jennifer Wagner, Vice President of Legislative Advocacy
Mark Minickiello, Vice President of Legislative Affairs
Pam Leavitt, Policy Advisor


Posted in Advocacy News, Business Solutions, Federal, GoWest Solutions, Industry Insight.