Job-creating, bi-partisan legislation will soon reach the U.S. Senate floor in the form of the Credit Union Small Business and Jobs Bill (S. 2231). Senate passage is the next step to creating 140,000 jobs and $13 billion in small business capital nationally that doesn't cost taxpayers a dime - a common sense approach to economic development. The only opposition comes from banks, which are maniacally focused on defeating the measure, costing Ohioans jobs and small businesses much-needed growth opportunities.
Specifically, S. 2231 would double the regulated lending capacity of safe and sound credit unions; thus, generating up to $275 million in new credit available to Ohio small businesses and more than 3,000 jobs. According to the Credit Union National Association, more than 500 credit unions nationally are at or quickly approaching the current cap, highlighting the need for Congressional action.
The desperate need for credit is evident by the strong growth of small business lending by Ohio credit unions. Since the beginning of the economic decline, when many banks began limiting access to credit, Ohio credit unions saw demand soar, increasing outstanding business loans by 98.5 percent (Dec. 2007 to Dec. 2011). Moreover, during the latest 12-month statistical period, member business lending originations by Ohio credit unions grew by 24 percent to $430 million. Concurrently, 57 percent of small business owners who sought financing from a bank were turned down, according to Pepperdine University.
Most importantly, credit unions are safe, strong, and ready to do more. Ohio credit unions are well-capitalized on average at 10.95 percent, well-above the 7 percent threshold recommended by regulators. Credit unions' ability to manage a strong loan portfolio during stressful economic times is an indicator of how they can benefit the economic engine and entrepreneurial spirit of our country.
If creating jobs is truly the No. 1 initiative of our Congressional representatives, then this legislation is absolutely a no-brainer. Nearly 3 million Ohio credit union members urge Senator Portman to join eight other Ohio colleagues and show his support for small business and job growth by voting yes on S. 2231.
Paul L. Mercer is president of the Ohio Credit Union League, 10 West Broad St., Suite 1100, Columbus, Ohio, 43215.