CU Small-Business Effort Wins Schumer's Backing

By Barba, Robert | American Banker, March 10, 2009 | Go to article overview

CU Small-Business Effort Wins Schumer's Backing


Barba, Robert, American Banker


Byline: Robert Barba

With the banking industry wounded from the financial crisis, credit unions are hoping lawmakers will finally pass a bill allowing them to expand their business lending.

The credit unions scored a key ally last week, when Sen. Charles Schumer, D-N.Y., said he planned to offer a bill that would scrap a 1998 law capping credit union small-business loans at 12.25% of their total assets.

There is no companion yet in the House, and any such legislation could face an uphill fight. However, some industry observers argue that credit unions have a good chance, since banks, which have fought off credit union expansion bills in the past, are deeply unpopular in the current political environment.

"The banking industry is in a tough position. ... I don't think they have the same pull that they have had historically," said Oliver Ireland, a partner at Morrison & Foerster LLP. "You have to conclude that lawmakers are unhappy with banks and not with credit unions. ... It may work in their favor."

Credit unions have fought for more than eight years to repeal the law, winning the support of key House members.

The efforts have not gained much traction in the Senate, but credit union representatives hope Schumer's support will change that.

"The potential for its passage has never been better," said John P. Magill, senior vice president of legislative affairs for the Credit Union National Association.

"It is now backed by a very senior influential member of the United States Senate. He is for it. He sees the need for it, and his track record of getting things passed is strong."

Schumer made a case for the bill last week by citing the banking industry's woes.

"With so many large banks in bad shape," credit unions need to be able to offer more small-business loans, he said in a press release.

"The situation facing these businesses right now is much worse than a matter of them simply being denied new loans. They are being strangled by having existing lines of credit pulled. A threat like this to small businesses could upend the livelihood of millions of workers and be catastrophic for the larger economy."

Bill Hampel, the CUNA's chief economist, estimates that eliminating the cap could result in nearly $10 billion worth of loans in the first year, because of interest from credit unions close to the cap, as well as those that were scared away from the business because of it.

Banking advocates argue that the economic crisis is not a good time for credit union expansion.

"We need people who have experience and a track record in business lending, not novices," said Ron Ence, vice president of congressional relations for the Independent Community Bankers of America. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

CU Small-Business Effort Wins Schumer's Backing
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.