Sherman and Fitzpatrick Introduce Bill to Allow Increased Credit Union Lending to Struggling Small Businesses
Washington, D.C. – Today, Congressman Brad Sherman (D-Sherman Oaks), who Chairs the Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, and Congressman Brian Fitzpatrick (R-PA) introduced the Access to Credit for Small Businesses Impacted by the COVID–19 Crisis Act of 2021. This legislation is designed to help ensure that community credit unions have the flexibility necessary to be able to provide their member businesses with the access to credit they need during the pandemic and throughout the economic recovery.
For over twenty years, credit unions have been subject to a federal member business lending cap, which currently limits a credit union’s loans to its member businesses at 12.25% of its total assets. In light of the urgent financial needs of so many small businesses as a result of the COVID-19 crisis, this legislation would provide credit unions with the additional flexibility necessary to serve their business members.
The Access to Credit for Small Businesses Impacted by the COVID–19 Crisis Act would address this issue by providing a tailored exemption to the member business lending cap for loans made by credit unions to aid in COVID-19 crisis relief and recovery for up to 1-year after the national emergency has ended. This exemption is specifically prohibited from allowing for member business loans which would undermine the safety and soundness of a credit union.
“In an emergency, many businesses won’t have the time to establish a relationship with a new lender,” said Congressman Sherman. “This legislation represents a tailored approach to giving credit unions the flexibility they need to assist their small businesses members struggling as a result of COVID-19.”
“Small businesses in every community across our country continue to suffer from rippling effects of the COVID-19 pandemic. As they navigate through these unprecedented times, having to establish relationships with new lenders only adds to their burdens," said Rep. Fitzpatrick. "Our bipartisan Access to Credit for Small Businesses Impacted by the COVID–19 Crisis Act of 2021 would ensure that our community credit unions have the maximum flexibility necessary to provide their small business members with the credit access, support, and hope they need to survive the pandemic.”
The text of the legislation is available here.