WASHINGTON, D.C., May 21, 2013 – The Competitive Enterprise Institute, a Washington-based free market think tank, commends legislation introduced by Sens. Mark Udall (D-Colo.) and Rand Paul (R-Ky.) that lifts regulatory barriers to credit unions making small business loans.
“The Udall-Paul bill, S.968, will lift unjustified regulatory barriers on America’s credit unions. So it shouldn’t just be cheered because it’s bipartisan, but because it spreads freedom,” says John Berlau, CEI’s senior fellow for finance and access to capital.
Credit unions are currently limited to lending no more than 12.25 percent of their assets to the businesses of their members. The Udall-Paul bill, and its House companion, would raise this cap to 27.5 percent.
“Because of government barriers to credit union business lending, thousands of entrepreneurial ventures may be unnecessarily deprived of the seed capital credit unions could provide to them,” Berlau explains. “This regulatory barrier is exactly what Udall-Paul would fix. The modest hike in the lending cap would pay big dividends for entrepreneurs and the economy.”
Berlau cites figures from a credit union association that 138,000 jobs could be created if the business lending cap were raised. He concludes. “Let’s support Sens. Udall and Paul in lifting the foolish barriers to business lending by credit unions, as well as go after barriers to both banks and credit unions that hold back the economy and its entrepreneurs.”
Read John Berlau’s post in OpenMarket.org: Udall-Paul Legislation Spreads Freedom for Credit Unions and Entrepreneurs