Geithner said the cap could be raised for credit unions that have been near the 12.25 percent limit for four consecutive quarters; are well capitalized; have no less than five years of experience underwriting and servicing member business loans; have strong policies and experience managing such loans; and satisfy other standards that the national Credit Union Administration has established to maintain safety and soundness.
Below is the legislative language submitted by Treasury.(click on image to enlarge)
This is a real victory for the bank lobbyists, who in consort Treasury officials added much qualifying language so as to make it as difficult as possible for credit unions to actually make loans to American businesses—despite the raising of the cap.
ReplyDeletePerhaps none of the credit union folks will point out the obscenity in this: That after pumping nearly $700 billion in taxpayer cash into stumbling banks plus a greater amount in near-zero rate lending to “unfreeze credit,” arrogant bankers still didn’t meet the government demand and defiantly cut lending to small businesses in the US by more than $350 billion in 2009. (FT, 3.23.2010 among other sources). Documented proof exists that bad banks turned their backs to Main Street.
No crocodile-tears here. Especially because of the unmentioned sweetener that is rumored as being thrown into to this deal for banks. If true we should be careful we don’t screw this up with unnecessary cross-industry agitation—the amount that could be lost is equal to decades of ABA dues.
Claim victory on this for the right reasons. The expanded authority is only half-baked for credit unions, and if all goes well, banks will get far more out of this than the competition. WhooHooo, we’re getting rich again, with another bank freebie from the taxpayers.