Gillibrand Introduces Legislation To Help Jumpstart Lending To Small Businesses, Create Jobs – Urges Senate Leaders To Include In Upcoming Jobs Package
Bill Would Increase Lending, Help Small Businesses Grow And Thrive
Huntington, New York – At the Bethpage Federal Credit Union on Long Island, U.S. Kirsten Gillibrand announced bipartisan legislation to spur small business growth and create jobs by increasing access to loans from credit unions. The Small Business Lending Enhancement Act of 2009 would increase access to credit union loans. By law, credit unions are required to limit member business lending to 12.25 percent of the credit union’s total assets. Senator Gillibrand’s bill would raise that cap to 25 percent of total assets, and increase the minimum business loan subject to the cap from $50,000 to $250,000.
This week, Senator Gillibrand is pushing to include this legislation in the jobs package that will be drafted in Congress in the coming weeks. New York State has 461 credit unions, 36 of which are on Long Island. According to the Credit Union National Association, this legislation would help create more than 7,000 jobs in New York without government expenditures.
“If we’re going to create new jobs and rebuild our economy for the long term, small businesses need more access to credit,” Senator Gillibrand said. “This commonsense legislation would free up lending at not-for-profit credit unions in every corner of America to small businesses. This would give small businesses more of the capital they need to get off the ground, grow and get thousands of Americans back to work.”
“The Promoting Lending to America’s Small Business Act of 2009 gives credit unions the opportunity to lend more but more importantly gives small businesses access to the capital they need to grow and prosper during these tough economic times and we appreciate the leadership that both Senators Schumer and Gillibrand have given all credit unions on this important issue,” said Kirk Kordeleski, President and CEO of the Bethpage Federal Credit Union.
Huntington Supervisor Frank Petrone said, "Small business is bedrock of our local economy, and credit unions have become the true community-oriented banking institution, taking deposits from local residents and investing them back in the community, where they will do their depositors the most good. When enacted, this legislation will clear the way for a new source of necessary capital for small businesses, helping them grow and create jobs."
“As a small business owner myself, I understand firsthand how critical Senator Gillibrand’s legislation is to jumpstarting our economy. Long Island---and America---will not see an end to the current recession until credit starts flowing again,” said Suffolk County Legislative Majority Leader Jon Cooper (D-Lloyd Harbor). “But the truly great thing about this bill is that it’s not directed to the multinational behemoths that dwell on Wall Street. The new credit union loans will benefit thousands of small ‘mom and pop’ shops like those you see all around us, helping them to prosper and grow jobs.”
“Credit unions know they are not the complete solution to the credit crunch that small businesses are facing, but by restoring their authority to fully serve business-owning credit union members they could be part of the solution,” said William J. Mellin, President and CEO of the Credit Union Association. “The Small Business Lending Enhancement Act of 2009 just makes good economic sense and it would not cost taxpayers a penny.”
In the past 15 years, small businesses generated nearly two-thirds of all new jobs created in the United States – yet during the economic crisis, small business owners have struggled to access credit they need to expand. As a result of the financial crisis, many banks have tightened their lending, but credit unions, which have dollars to lend, are still restricted from filling the gap.
According to the Credit Union National Association, the reforms in the Small Business Lending Enhancement Act would increase small business lending by $10 billion within the first year of their enactment, generating more than 100,000 new jobs nationwide. Further, Bethpage Federal Credit Union would be able to grant an additional $461 million in business loans under this legislation, raising its cap to $921 million.
The legislation would also encourage more credit unions to start lending to small businesses. Under the current law, many credit unions find it difficult to start member business lending programs because the cost of meeting high regulatory and staffing requirements is too expensive relative to the cap. Credit unions say that raising the amount they are able to lend would make it easier to recover costs, and therefore would increase the number of credit unions able to start small business loan programs.
The Small Business Lending Enhancement Act was sponsored by Senator Mark Udall and cosponsored by Senators Charles Schumer (D-NY), Joseph Lieberman (I-CT), Olympia Snowe (R-ME), Barbara Boxer (D-CA), and Susan Collins (R-ME). Similar legislation has been introduced in the House of Representatives by Paul Kanjorski (D-PA) with 48 cosponsors.
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