Congress Insisted to Increase Business Lending Cap
Congress Insisted to Increase Business Lending Cap
Assuring that small-business lending would grow, credit unions insist that the Congress increase their business lending cap. However, there are some who believe that the facts are altered.
Sen. Mark Udall proposed the Small Business Lending Enhancement Act (S. 2231). It would transfer loans at community banks to credit unions, which do not actually pay taxes. For years now, community banks in cities all over America pay their taxes and have been assisting small businesses by means of loans.
The truth is that credit unions have sufficient small-business lending authority. The proposed Small Business Lending Enhancement Act would basically let credit unions which do not pay taxes to make big commercial loans. As a result, it would benefit them in terms of safety and soundness.
However, credit unions are also aware of the disadvantages that will come with the proposal. Some of those who disagree with the proposal include credit union executives from places such as Michigan, Washington state and California. Moreover, they are saying that it might result to reckless lending and rising credit union failures.
Stuart Perlitsh, the chief executive of Glendale Area Schools Federal Credit Union wrote a letter addressed to the Senate leaders last April 11. According to the letter, most of the credit unions will not profit if the business lending cap is increased, and instead, they will pay more expensive premiums caused by the credit union failures.
One other truth is that allowing the shift of business loans from taxpaying community banks to non-taxpaying credit unions will place the Treasury in more debt. In the previous Congress, a parallel bill would have cost taxpayers lost revenue of nearly $354 million after a decade. Apparently, this proposal would cost greater than that.
If credit unions want to develop their business lending, then they have another option, which is to switch into a mutual saving bank charter. In fact, a few have already done this because of its flexibility.
Related posts on loans for people with bad credit:
- Student Loan and Highway Jobs Bill Approved by The Congress Student Loan and Highway Jobs Bill Approved by The Congress Last Friday, the Congress approved the bill that will save 2.8 million jobs on construction and transportation, and also preventing an increase in the interest rate of loans for college students. The…...
- Another Attempt to Put a Cap on Payday Loan Interest Rates Lawmakers are passing a bill as a second attempt to control the industry of payday lending. During the previous year, lobbyists and politics had a big role in creating legislations for the purpose of regulating an industry that is said…...
- Credit Unions Assist People with No Credit Credit Unions Assist People with No Credit If you are aspiring to open a small business, for instance, landscaping, you will more likely need a loan. However, if you do not have any credit at all, going to a bank will…...
- Credit Unions Cry for a Higher Ceiling Credit Unions Cry for a Higher Ceiling According to the Federal Deposit Insurance Corp, by the end of last year there exist 7,240 credit unions and 7,357 banks in the United States. These credit unions have $974 billion worth of assets…...
- US Congress Pressured to Stop Doubling of Student Loan Interest Rate US Congress Pressured to Stop Doubling of Student Loan Interest Rate The US Congress is being pressured to do something to keep low interest rates on Stafford loans. There are 225,000 Georgia students who rely on these loans to be able…...
Filed under: Business Loans • Loans • loans for people with bad credit
Like this post? Subscribe to my RSS feed and get loads more!