[Congressional Record Volume 158, Number 42 (Wednesday, March 14, 2012)]
[Senate]
[Pages S1673-S1674]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 SMALL BUSINESS LENDING ENHANCEMENT ACT

  Mr. UDALL of Colorado. Madam President, I have come to the floor to 
speak about an opportunity to expand capital for small businesses by 
lifting the arbitrary limit on the credit unions ability to serve small 
businesses. I have done this on a number of occasions over the last 
couple of years so the President knows that this is a cause that is 
important to me. It is important to me because there is a phenomenon in 
our country where small businesses are starving for credit. Yet the 
Federal Government is still standing in their way.
  I am talking about the smallest of small local businesses. These are 
the men and women who need $50,000, $100,000 or maybe $200,000 to move 
from their garage to a retail storefront, to renovate their sales floor 
or upgrade their equipment and expand. They are often too small to be 
worth a bank's time or they don't fit the lending guidelines of the 
bank's corporate headquarters. But these small business owners know 
credit unions in their community have money to lend and these credit 
unions truly want to help. They probably see each other at Little 
League games, church, play cards together--they socialize. Instead of 
being able to offer the bridge loans that the small local businesses 
need, the credit unions end up saying: Sorry, we want to help you but 
the Federal Government has set a limit on how many businesses we can 
loan funds to.
  Now we are moving to the Jumpstart Our Business Startups Act, or the

[[Page S1674]]

JOBS Act, that the House passed last week. That bill is aimed at 
increasing the availability of credit to startup companies by 
expediting and easing the process of undergoing an IPO, or an initial 
public offering. I think that is a noble goal, especially as our 
economy still struggles to create jobs. But the problem is we are still 
leaving the little guys behind--the people in each and every one of our 
neighborhoods who want to expand their businesses and hire people as 
soon as possible.
  Unfortunately, the JOBS Act is aimed at companies with revenue under 
$1 billion. Let me repeat that--billion with a B. These companies may 
well need help with IPOs, but I am talking about offering relief to 
traditional Main Street businesses.

  I am still committed to allowing credit unions to increase the amount 
of money they can lend to small businesses. So I will, once again, 
introduce the bipartisan Small Business Lending Enhancement Act as an 
amendment which would open additional credit to small businesses 
without costing taxpayers a dime.
  I know the Presiding Officer has many small, wonderful towns in her 
State where she sees many small businesses. I wish to talk about a 
couple small businesses in my State. Stacy Hamon is a Coloradan who 
owns the 1st Street Salon in Thornton. She was turned away by a bank 
because her loan was too small to be worth the risk. She went to her 
credit union. They wanted to help her. They helped her. She opened a 
larger business and she has created jobs in the process.
  I am also talking about people such as Lisa Herman of Broomfield, CO. 
She is the co-owner of Happy Cakes Bakeshop in Denver's Highland 
Square, and she needed a loan to expand and cater more weddings. She 
was turned away by her bank. She went to her local credit union and 
that credit union was able to provide her with the loan she needed to 
continue to grow her successful business and hire more Coloradans.
  Stacy and Lisa don't need a $1 billion IPO, they need a small bridge 
loan. We could be making an enormous difference in these local 
communities with mere pennies on the dollar, which is what the JOBS Act 
is focused on. Yet my amendment would be the only single piece of the 
JOBS Act that would actually help small businesses or directly create 
jobs.
  Put simply, credit unions specialize in these small loans to small 
business. In fact, the average credit union small business loan is just 
$219,000. In contrast, the Federal Reserve has told us many banks have 
quit considering loans under $200,000 because they are not worth their 
time.
  Credit unions know these small business owners and they have money to 
lend to them. Unfortunately, Federal law still limits the amount of 
small business loans a credit union can extend to 12 percent of their 
assets. Nearly 350 credit unions are facing this cap and over 500 are 
having to slow down or stop their business lending altogether. That is 
hard to believe; it seems such a missed opportunity. In effect, we in 
government are telling these financial institutions they cannot help 
create jobs in their local communities. That is why my amendment would 
double the amount of money credit unions can offer small businesses.
  Let me turn to my friends in the banking sector. We have heard from 
banks over the years, and they say they think it is unfair that they 
have to compete with the credit unions. The fact is this isn't about 
banks or credit unions; it is about small business. These financial 
institutions, quite frankly, serve very different small business 
populations. Credit unions serve the smallest of small businesses that 
often must resort to relying on credit cards with comparatively high 
interest rates in order to invest in equipment to grow their 
businesses.
  These are business owners who have been turned away or ignored by 
large banks. We are talking about new loans to new and growing small 
businesses. After over 100 years of lending to small businesses, credit 
unions only represent 5 to 6 percent of all small business loans. Even 
if increasing the limit on credit union lending were to double their 
market share, banks would still have 90 percent of the market to 
themselves.
  I have also heard the banks say this proposal is unproven or somehow 
an unsound way of increasing small business loans. But the truth is 
credit unions have been making small business loans since their 
inception in the early 1900s. That is, by my math, over 100 years. It 
wasn't until 1998 that there were any limits whatsoever on how much 
they could lend.
  The credit unions' own regulator, the National Credit Union 
Administration, has endorsed lifting or even eliminating the small 
business lending cap. The NCUA chairman testified before Congress that 
``increased business lending is good not only for the credit union, but 
also for its members and the communities in which the credit union 
operates.''
  I have to say I am frustrated. Why can we not agree on uninhibited 
small business support growth and job creation? Let's not let the 
squabbles between banks and credit unions keep these jobs from out-of-
work Americans.
  I will conclude by acknowledging that we passed earlier today a 
bipartisan transportation bill and, in so doing, we voted on amendments 
dealing with everything under the Sun, from contraception to 
privatizing rest stops. So I sure hope we can have an open amendment 
process during consideration of the JOBS Act and include this important 
amendment, this important legislation, which would help small business. 
After all, if we are going to tell the American people this bill is 
about increasing access to capital--we have heard that said over and 
over, that this is about access to capital--we sure better be willing 
to start with those small business owners on Main Street. Colorado 
common sense and New Hampshire common sense could prevail. We ought to 
at least have a chance to consider this important issue and to debate 
this idea on the floor of the Senate and, I hope, include it in the 
JOBS Act. Because access to capital is what is needed right now and the 
credit union sector is willing and able to do so.
  Madam President, thank you for your attention. I yield the floor and 
I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BENNET. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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