Tomorrow the Senate Banking Committee will be holding a hearing on S. 509, the “Small Business Lending Enhancement Act of 2011,” introduced by Senator Udall (D-CO). This legislation will increase the cap on member business lending (MBL) from 12.25% to 27.5% of total assets for well-capitalized credit unions and allow these community-focused institutions to play a more significant role in rejuvenating the nation’s economy.
S. 509 creates a new source of capital to refinance the nearly $1.2 trillion of commercial real estate loans with balloon mortgages maturing over the next few years thereby helping to prevent the commercial real estate sector from holding back the nation’s economic recovery.
In essence, most REALTORS® consider themselves a small business and this bill will also have benefits beyond the commercial real estate sector. It would increase access to desperately needed capital for the small businesses that employ nearly half of all Americans and account for 60% of U.S. job creation. Lending to small businesses declined $43 billion last year, and community banks, which hold 52% of all small business loans, were accountable for nearly half of that drop.
Most of what you have read in this post so far and more can be found in a letter submitted to the Chair and Ranking Member of the Senate Banking Committee today in response to the hearing tomorrow. NAR strongly believes credit unions have the ability to help fill the commercial real estate and small business lending gap. If S. 509 is signed into law, the Credit Union National Association estimates that credit unions could lend an additional $13 billion to business in the first year after implementation, helping to create 140,000 new jobs. This bill will not cost the U.S. taxpayer a single dime or increase the size of government.
Get involved today. Register on the REALTOR® Party Action Center to participate in Calls For Action and invest in the REALTORS® Political Action Committee (RPAC) joining a multitude of other REALTOR voices on important pieces of legislation like S. 509 and many others.
- Congress: Stop Squabbling And Let Credit Unions Make More Small Business Loans (businessinsider.com)
- NAR among 30 Organizations to Sign Letter to Senators (commercialsource.com)
- GAO Recommends Updated Guidance for Commercial Lending (commercialsource.com)