Oregon Senator Wyden Introduces Legislation to Allow Credit Unions to Better Serve Main Street During COVID-19
Similar legislation is pending in the House to exempt credit unions from the member business lending cap for one year.
Small businesses are the engines that fuel job growth, but they’ve been challenged like never before during the COVID-19 pandemic.
Not-for-profit, cooperative credit unions are often the first resource small businesses reach out to for financial support. Yet, since an arbitrary rider was attached to the Credit Union Membership Access Act 22 years ago, credit unions have been limited to lending no more than 12.25% of their assets to small businesses.
Senator Ron Wyden (D-OR) introduced legislation this week to change that — at least temporarily. S.3676, “A bill to extend certain temporary credit union provisions enacted under the CARES Act, to include an exception for disaster area member business loans made by insured credit unions” exempts credit unions from the MBL cap for one year. If passed, the bill will allow credit unions to make loans to businesses impacted by the most serious health crisis America has seen in more than 100 years.
“Our banking system has left the mom and pop shops on Main Street behind in this crisis,” Wyden said. “These small businesses are desperate for relief … Congress needs to do more to help community lenders better serve our small businesses as they weather this storm. The next COVID stimulus package must include help for credit unions.”
Similar legislation is pending in the House, where Rep. Brad Sherman (D-CA) and Rep. Suzanne Bonamici are also sponsoring bills to exempt credit unions from the member business lending cap during the COVID-19 response.
“This legislation will allow credit unions to continue helping small businesses to open, grow, and survive these challenging times,” said Jennifer Wagner, the Northwest Credit Union Association’s Executive Vice President and Chief Advocacy Officer. “Now, more than ever, is the time to empower credit unions to serve more of their local small-business members. We appreciate the leadership of Sen. Wyden, Rep. Bonamici, and their bipartisan co-sponsors in helping Main Street.”
Sen. Wyden’s bill has been referred to the Committee on Banking, Housing, and Urban Affairs.
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