Although Senator Al Franken (D-Minn) and former Minnesota Governor Tim Pawlenty didn’t pound their fists on the podium demanding that the credit union member business lending cap (MBL cap) be raised during the Minnesota Credit Union Network’s (MnCUN’s) Annual Meeting & Convention earlier this month, their message was loud and clear.
“The answer resides not with career politicians but with entrepreneurs,” Pawlenty said during the meeting. “The real juice of the economy is small and mid-size businesses.”
Both Sen. Franken and Pawlenty were featured speakers at MnCUN’s meeting, which drew a significant amount of attention as the Senate debates whether to raise the credit union business loan cap.
Lawmakers are currently pondering Senate Bill S. 2231, which would raise the credit union business lending cap from 12.25% of a credit union’s total assets to 27.5%. The vote has been postponed until this summer, at the earliest. Numerous credit union lenders have talked to an endless line of business members in desperate need to save their company and not lay off staff, however strict bank loan requirements have left many out in the cold.
A perfect example is a story about a little landscaping business in Des Moines, Iowa called Landscapes by Martin. Business owner Martin Ortiz Rangel wrote an op-ed piece in the Des Moines Register about what happened when he sought a business loan from a bank to start his company.
He writes, “When I dreamed of starting my landscaping business I needed a loan. I went to a bank and was denied. I didn’t have bad credit — I just didn’t have any credit. A credit union was the only financial institution willing to take a chance on me to build my credit history. I could tell they believed in me and valued my business plan. I haven’t let them down. Landscapes by Martin is now a thriving local business.”
Although Rangel secured his loan through Cornerstone Credit Union ($15.3 million, Des Moines, IA) he is concerned that other entrepreneurs won’t get the same chance in this rough economy.
Rangel pleads with lawmakers to take real people into consideration when reviewing the bill. “To each of the employees I’ve been able to hire, the jobs I’ve created matter, and those jobs are a direct result of the faith Cornerstone put in me. I’m asking Iowa’s senators to give credit unions the chance to help more small business owners. Raising the lending cap is good for Iowa’s economy.”
Sen. Franken and Pawlenty Going to Bat for Businesses
Both Sen. Franken and Pawlenty explained that the best way to revive the economy was to prop up small to medium sized businesses with more lending opportunities.
“I want you to be able to continue providing capital to small businesses and to continue doing that at a more robust rate by raising the cap,” Sen. Franken said to the group of credit union professionals and volunteers during the MnCUN meeting.
According to Rachel K. Anderson, Director Communications at the Minnesota Credit Union Network, the overall mood seems to be trending toward optimism that S. 2231 will pass., however the vote has been postponed until summer at the earliest.
“Similar to CUNA's stance on this issue, we are optimistic that this passage has the ability to pass the Senate,” she says. “Elected officials are repeatedly hearing from small businesses that they are struggling to get capital. Elected officials understand the role that small businesses play in boosting the economy, and the member business lending legislation has the ability to provide the needed capital. This bill has the potential to pass the Senate, but it will require complete advocacy efforts from all credit unions across the country.”
She adds that credit unions throughout her state have been continuously supporting this bill. “Throughout the recess, Minnesota credit unions have continued to do their part in supporting small businesses. Over the past year, credit union lending grew 8% while bank business lending decreased 2%. The average business loan Minnesota credit unions make to small businesses is $133,000, so credit unions are definitely helping small businesses with these loans. If the member business lending legislation is passed it is estimated that Minnesota credit unions would be able to lend an additional $166 million in the first year, which would create approximately 1,800 jobs.”
Sen. Franken and Pawlenty, both credit union proponents, stood by their desire to see credit unions continue to make business loans.
Additionally, Pawlenty expressed his pride in credit unions by saying, “I’m a member of a credit union, and I’m a very satisfied member. I hope you are proud to be working with and for credit unions. They do wonderful work.”
Don’t let the American entrepreneur die - find a credit union and voice your opinion about S. 2231 today.
What else can you do?
With Congress back in session, now is the perfect time to call 1-877-642-4223 and tell your Senators to vote for S. 2231.