With four Missouri credit unions - including one in Springfield - near the Congress-imposed member business lending cap, the Missouri Credit Union Association is asking legislators to raise limits and pave the way for more business loans.
According to an MCUA news release, credit unions can now make business loans that equal 12.25 percent of total assets, but two bills – SB 509 in the U.S. Senate and HR 1418 in the U.S. House - propose raising the limit to 27.5 percent of assets for each credit union.
Springfield-based Assemblies of God Credit Union now has a business loan portfolio of $13 million, and is faced with a cap of $13.3 million, which doesn’t leave enough room for new loans.
“We do have business loans for our members, but we’re actually capped out on that because of the regulatory limits,” said AGCU President and CEO Paul Ebisch, during a recent interview for Springfield Business Journal’s July 4 Banking & Finance issue. “It’s kind of a battle somewhat between the banks, I guess, and Congress and such.”
As a proponent of credit union and community banking entities, Ebisch said growing national regulations restrict those institutions.
“I do believe we need strong roots in the community to build businesses, especially small businesses,” he said. “That’s who we focus on, small businesses or church business operations. That’s our bread and butter.”
MCUA also is asking for Congress to conduct an oversight hearing on the $30 billion in federal dollars granted to the banking industry in the Small Business Jobs Act of 2010 to stimulate small business.
If the cap is lifted, 1,676 new Missouri jobs could be generated, with $154.2 million in additional business loans anticipated in the first year, the release said. Nationwide, the higher cap would bring 140,000 new jobs and $13 billion in new member business loans.
MCUA, a trade association for 139 federally and state chartered credit unions with locations in Missouri, has sent letters urging action to Missouri’s U.S. senators, Democrat Claire McCaskill and Republican Roy Blunt, the release said.
For more on this story, look to the July 4 Springfield Business Journal print edition.[[In-content Ad]]
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