Iowa's small businesses are the driving force of employment and economic improvement. However, small businesses aren't able to get the funding they need to expand, hire and operate because banks have pulled back on their lending. One of the easiest ways to help small businesses gain access to the credit they need is to lift the current credit union member business lending cap. Federal law currently limits credit unions as to the amount of business loans they can make. A number of credit unions have hit the cap and are having to turn away small businesses in need of credit.
As the Senate works on legislation to spur the economy and grow jobs,credit unions should be part of that solution. Specifically, the federal cap on credit unions' ability to make member business loans should be raised. Currently, credit unions' total business loans to members cannot exceed 12.25% of assets. S.2231 is bi-partisan legislation that would raise the member business lending cap to 27.5%. This would help credit unions provide small businesses with the capital they need to create jobs. This is very important, as banks have tightened lending standards,leaving qualified borrowers with fewer options to find a loan.
We need urgent action! Please send a message to Iowa Senators Harkin and Grassley to support S.2231 and help create good jobs in Iowa and stimulate the economy. Lifting the cap would create more than 2,000 new jobs in Iowa with no cost to taxpayers.