- - Tuesday, July 28, 2015

ANALYSIS/OPINION:

Credit unions hold six percent of the business lending market. Credit-union business loans are made in the local community and are typically focused on small businesses, churches and real-estate rentals. The average credit union business loan is less than $225,000. During the financial crisis the highest loss rate was less tha one percent. Do these loans sound like the “risky large loans,” as your editorial suggests (“End run by the credit unions,” Web, July 26)?

Credit unions are risk-averse due to their structure. As member-owned, not-for-profit, community-based financial institutions, credit unions eschew risk. For the first 90 years of their existence, credit unions weren’t limited in business lending. Yet an arbitrary deal two decades ago forced them to cap business loans at 12.25 percent of assets. The intent was to limit the exposure of credit unions to large commercial loans, but instead the deal has impeded credit unions from loaning to small businesses, the drivers of job growth and innovation in local communities.

Credit unions have demonstrated the safety and soundness of their business loans to their members and their regulator. Given the facts, I’m confused about why The Washington Times thinks it’s bad to have a regulator understand the industry it oversees.

JIM NUSSLE

President and CEO, Credit Union National Association (CUNA)

Washington


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