Credit Union Journal Daily Briefing | Thursday, February 25, 2010
WASHINGTON – Federal Reserve Chairman Ben Bernanke yesterday refused to endorse an increase in member business loan limits for credit unions, despite bills in the House and Senate asking for the hike.
The Fed Chairman's stance is important because the credit union lobby is hoping to get an endorsement from the Obama administration for the pending legislation.
Bernanke on Wednesday told the House Financial Services Committee the current 12.25% of assets cap on member business loans, and other restrictions, were enacted in exchange for credit unions’ tax exemption. “The banks would complain obviously that if credit unions are allowed to do everything banks can do, why are they tax favored? I think that's the trade-off Congress has to consider," Bernanke said in response to a question from Rep. Brad Sherman, a California Democrat who sponsored the MBL bill in the House.
Credit unions have been lobbying for 10 years to lift the cap, enacted as part of HR 1151, the CU Membership Access Act, which legalized multiple group fields of membership for credit unions.