Northwest Credit Unions Step Up to Loan to Main Street Businesses

An analysis by the Northwest Credit Union Association (NWCUA) finds that as of March 2013 member business lending by Northwest credit unions grew 7.5% since March 2012.

“Business loans are a service Main Street needs and we see Northwest credit unions doing their best to help,” said Dan Hein, vice president of fnance for the NWCUA. “In the first quarter this year, credit unions in this region added $200 million in new member business loans, and that reflects a $43 million increase compared to last year’s Q1 performance.”

As of March 31, 2013, Northwest credit unions had $2.4 billion in outstanding member business loans. Hein also noted sound decision making by credit union lenders, with first quarter reportable delinquencies—two or more months delinquent—down 49% over Q1 2012.

Credit unions are limited by law to lending 12.25 % of their assets for member business loans. Many credit unions have relied on low-income designation for flexibility to lend above that limit, but federal legislation would permanently grant well-managed credit unions the authority to increase their business loan offerings to 27.5% of total assets.

Senate Bill 968, the Small Business Lending Enhancement Act of 2013, has been assigned to the Committee on Banking, Housing and Urban Affairs. The legislation has 15 cosponsors.

House Resolution 688, the Credit Union Small Business Jobs Creation Act, has been referred to the House Committee on Financial Services and has 102 cosponsors, including Earl Blumenauer (OR-3), Suzanne Bonamici (OR-1), Jaime Herrera Beutler (WA-3) , Kurt Schrader (OR-5).

The Credit Union National Association (CUNA) reports that nationally, 500 credit unions are hamstrung from doing additional business lending as they have reached or are nearing the 12.25% cap.

While an analysis by SNL Financial found that small business lending by U.S. commercial and savings banks declined 2% in 2012, the nation’s biggest banks still control the lion’s share of the business lending category. Banks with greater than $10 billion in assets hold 45% of the nonfarm small business debt.

 

Questions? Contact Lynn Heider: 503.350.2225, lheider@nwcua.org.

Posted in Advocacy News, Marketing & Communications, NWCUA.