Lending Cap Stifles CU's Willingness to Lend

Testifying in front of a House subcommittee last week, Credit Union presidents vented their frustrations over entering the SBA arena. After maintaining active lending while other business lender retrenched, these credit unions are now running up against a lending cap, which could bring their operations to a halt. "The 330 credit unions that are currently making SBA loans are managing to the cap," one credit union CEO said, "and the rest say it's a big investment of time and money just to hit a cap in the future. No thanks." Continuing to make Members 1st-funded loans created or saved thousands of jobs last year, but the more active lenders could be forced sell some of their business loans on the secondary market or stop making loans if the cap isn't increased. The credit union leaders also complained about their experience with the SBA; "The difference in processing time between a Preferred Lending Program lender and a non-PLP lender has grown to months," one said, "And effectively acts as a barrier to a new lenders entering the SBA marketplace."

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http://m.cutimes.com/2012/06/22/member-business-lending-cap-keeps-cus-out-of-the-s