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Capital small businesses are looking for loan alternatives a lot of them cannot get loans and guess who they're going to.
Credit unions why because the credit unions are actually about obliging -- They are doing so despite -- cap to their business lending the Credit Union National Association is lobbying congress to double their business lending -- Q and says raising the cap is imperative to keep small businesses afloat.
And creating jobs joining us now from that credit union conference in Las Vegas is my check.
He is their vice president of economics and statistics -- good to -- a lot of folks just know credit union is.
A place of work where you get a car -- -- someone like that but small business loans is becoming a bigger part of your portfolio you would now are capped.
Two at twelve point.
Twelve and a quarter percent right that's as much of your holdings as you can have a business -- you want to raise that to 27 point 5% that I get that right.
That's right yes.
I think you're you know -- your initial comment was right on.
We suspect that there are some small businesses that don't really realize that the credit unions.
Are in the marketplace.
Delivering business loans to small businesses in fact we are.
And not only that but we've continued to -- throughout the economic downturn.
In fact who never business loan portfolios -- credit unions are growing faster than any other segment.
Of our loan portfolios.
We we've we've we've recorded double digit gains in business loans in each of the past twelve years.
And through difficult times we continue to -- last year for example in the last twelve months.
We've increased our business loan portfolios by 10% in contrast commercial banks have seen -- contraction in their business home portfolios of 10%.
Well okay so you're stepping in your fill in the void where banks cannot or will not step up to the plate that's terrific but now you would like your cap raised by congress.
Here's what the American people do not have taste for at the moment.
Another bailout how can you assure her that you wouldn't get into trouble with the credit union by lending too much and then some of the small businesses might.
-- go belly up.
Well -- just say we've been in this marketplace since our inception in United States a hundred years ago we have a long and storied history of making loans to small businesses.
And the asset quality of those loans is actually quite -- In the most recent period march.
2010 data that we have.
Shows that loan loss rates at credit unions for business loans there's a third of what we see in the commercial banking sector.
So we have the ability to make the loans.
We're in the market doing it.
And we're doing it in a very conservative.
And safe and sound manner.
Now I'm getting credit is tough and there's no doubt that a lot of small businesses are are complaining about -- not being able to get enough credit however.
You don't need credit if you're not selling your product and as you just heard the Federal Reserve came -- was minutes from its last meeting.
Suggesting that this slowdown of the recovery is really significant.
The market is showing signs of strain there as well could it be that your current level of lending might be sufficient for this kind of -- recovery.
Well we don't think so we know anecdotally at the very least that many many small businessmen cannot get loans I've been to several.
Hearings on and on Capitol Hill where the people -- are at those hearings are saying we need help we're we're being turned down for loans.
So we know at least anecdotally that that's the case.
We also have data from the Federal Reserve that shows that commercial banks have change their underwriting criteria and that they're making it much more difficult.
For those loans to be made.
But you're right the difficulty for us is that we do have a twelve and a quarter percent cap.
And -- -- increasingly.
Credit unions are bumping up against that capsule that really fast growth that I talked about is starting to slow down.
Luckily the good news is that senator Udall has drafted an amendment.
Two so some.
Legislation -- before congress today.
And that amendment would lift the cap to 27 and a half percent we conserve -- -- believe.
That doing so would allow credit unions to inject another ten billion dollars in capital -- and loans to small businesses.
Can -- create a 100000.
New jobs in the United States -- we.
Right here in life after all we like that their community based we like that they you have such a close relationship between the lender.
And the -- that's something that has been missing that really led up to the crisis we're in so we appreciate your -- Mike -- good luck thanks for coming in.
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