The president of the Credit Union National Association, Bill Cheney, was invited onto CNN to speak about how credit unions are handling the lingering financial crisis. Take a few minutes to watch it:
Cheney details several differences between banks and credit unions. Most importantly, Cheney believes that the current model of offering the perks our members have grown accustomed to is a sustainable model.
However, the one thing from the article that you may want to pay particular attention to is the discussion on the small business lending cap. For those of you who do not know what it is, in 1998 an artificial cap was implemented to limit business loans to 12.25% of credit union assets.
For some time now, credit unions have been working to get that cap lifted to 27.5%. Doesn’t seem like much, does it? The benefit, however, would be astronomical: it would put an estimated $13 billion dollars into the economy and create 140,000 jobs – all without the use of taxpayer money.
Banks, of course, don’t want to lose this lucrative piece of the pie and have been fighting it, including saying there isn’t a demand for small business loans. Strange, considering credit unions have seen a 38% increase in business loans.
Take a look at the video and share your thoughts.