Magazine article American Banker

Eye on the States: Wisconsin Credit Unions to Form Joint-Venture Small- Business Lender

Magazine article American Banker

Eye on the States: Wisconsin Credit Unions to Form Joint-Venture Small- Business Lender

Article excerpt

To bankers' dismay, three Wisconsin credit unions are banding together to make small business loans in the booming Fox Valley.

Banta Community Credit Union in Menasha, CitizensFirst Credit Union in Oshkosh, and Fox Communities Credit Union in Appleton said they intend to form a "service corporation," Business Lending Group, for such lending this month.

Wisconsin law lets credit unions form for-profit service corporations to offer products such as debit cards, equipment leases, and insurance to members.

Business Lending Group would be the first such entity focused on commercial lending.

It would make loans of up to $1 million in a market that the credit unions say are underserved by banks, according to local media reports.

Executives from the credit unions did not return calls to American Banker seeking information about Business Lending Group.

But Wisconsin banks, saying credit unions are stepping on their turf, have filed complaint letters with the state Department of Financial Institutions.

The banks say they want to be certain that the credit unions will lend only to members.

"Credit unions were formed to serve the little guy, not so that they can compete for business loans with taxpaying banks," said Harry J. Argue, executive vice president of the Wisconsin Bankers Association.

The Department of Financial Institutions has not responded to the banking industry's concerns, but spokeswoman Lisa Roys said in an interview this week that the new service corporation would lend only to members of the credit unions. …

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