Bad credit installment loans Oklahoma

But there are no sound publie policy reasons not to. Failure to expand the credit union member business lending cap would literally leave money on the table that could be loaned to small business.

The bankers say business lending is not a part of the credit union mission. The facts show that credit unions have been doing business lending since day one. The earliest credit unions were founded so that people bad credit installment loans Oklahoma could borrow money to buy goods at lower cost bad credit installment loans Oklahoma and sell them for a profit.

The founders of the American credit union movement very specifically noted the bad credit installment loans Oklahoma important role credit unions should play in providing access to credit for small businesses. To all of them as well, the cooperative offers financial assistance that is bad credit installment loans Oklahoma most precious. Serving the business borrowing needs of credit union members is not only a part of the credit union mission, it is part of the credit union DNA. Congress imposed a statutory cap on credit union member business lending in 1998 at the behest of the banking industry which opposed the Credit Union Membership Access Act of 1998. Existing safeguards, coupled with the new capital and other reforms in the bill, arc sufficient to protect against any safety and soundness risk from member business loans. Furthermore, most credit unions have excess liquidity today which is depressing their overall earnings.

Moving bad credit installment loans Oklahoma assets from low-yielding investments into higher-yielding member business loans, even after accounting for credit losses on those loans, will increase credit union earnings, capital contributions, and, importantly, overall safety and soundness. Credit unions arc committed to operating in a safe and sound manner, which is why we sought the guidance of the Department of Treasury and the NCUA in developing legislation to increase the credit union member business lending cap in a manner that docs not jeopardize credit union safety and soundness. It is a contradiction - and the bankers arc wrong on both counts. The member business lending cap affects every credit union that has a member who looks to them for financing a new or existing small business.

As noted above, member business loans have been the fastest growing component of credit union lending every year since 2001.

That growth in credit union member business loans is now slowing as more and more credit unions approach their caps. The credit unions that arc now near the cap account for over half of the business loans subject to the cap. Having been there for their small business-owning members over the last several years, these credit unions will see their ability to continue this service diminish in the absence of Congressional action to increase the business lending cap. In fact, credit union member business lending actually helps local communities, ineluding community banks, by stabilizing the local economy and creating jobs. Raising the credit union business lending cap is equivalent to an increase in the supply of business credit. Unless the demand for business loans were totally price inelastic, that increase in supply would lead to some increase in loans (i. Recently, researchers at the Federal Reserve Board estimated a semi-elasticity of demand for unsecured business loans to be -1.

John C, and Fgon Zakrajsek (All of the Division of Monelaiy Affairs. Increasing the cap - rather than removing the cap - guarantees that the increases in member business lending would be accomplished while eredit unions remain primarily focused on consumer lending. If the member business lending eap was to be increased, and an additional 15. The bankers say that credit unions should not be granted an expansion of powers because of their tax status.

This specious and sidetraeking argument ignores the faet that roughly 2,500 banks are Subchapter S institutions, and. The credit union tax status, which has been reaffirmed by Congress several times, is based on the structure of credit unions as bad credit installment loans Oklahoma not- for-profit, democratically-controlled cooperatives. That stmeture has not changed for the past 100 years. The tax status has nothing to do with the breadth or volume of credit union products or service offerings. In this country, there are many who are underserved, and the credit union record on serving the underserved is well demonstrated.

Home Mortgage Disclosure Act (HMDA) data clearly and consistently show that compared to banks, credit unions make a greater percentage of their loans to lower income individuals and that lower income households arc much more likely to be approved for loans at credit unions while much less likely to be denied a loan at credit unions.

Credit unions have repeatedly attempted to reach out to serve more individuals in lower-income households. However, bankers have used the courts to bar those cfTorts. As we recover from the Great Recession, small businesses are underserved.

Many 73 25 modest means individuals run small businesses and need credit. This is especially true in recessions because unemployed and discouraged jobseekers are more likely to form businesses during these events. Credit unions want to meet the needs of their busincss- owning members, and the last Treasury study on credit union member business lending found that credit union loans to small businesses go disproportionately to business owners on the lower end of the income scale. As noted above, small business surveys have indicated that more small businesses indicate their financing needs ate not being met than in 2005-2006 and borrower approvals remain significantly lower than when nine out of ten borrowers had their credit requests approved.