This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Credit Unions Would Lend More if the Politicians Would Allow It

Stocks in this article: BAC JPM WFC

Small-business lending is a hot-button issue given recent data showing that banks in the fourth quarter improved their rate of approval for loans under $1 million for the first time in 10 quarters by 0.4% to $586 billion, according to Call Report data by the Federal Deposit Insurance Corp.

That includes increases by all loan size categories, including loans under $1 million, loans between $100,000 and $1 million and those under $100,000, boosted by lending from banks with at least $1 billion in assets, according to a report issued by the Small Business Administration's Office of Advocacy.

Bank of America (BAC), Wells Fargo (WFC), JPMorgan Chase (JPM) and other large-banking titans have been promoting their commitments to small-business lending.

And small banks are aggressively increasing their SBA lending, says Biz2Credit CEO Rohit Arora. Small-business loan approval rates by banks with less than $10 billion in assets reached a record high of 50.8% last month, according to Biz2Credit's monthly lending index.

Small banks and credit unions typically compete for the same small business borrowers.

On the other hand, March small-business loan approvals at credit unions are at a 10-month low. Loan approvals have fallen by one-fifth from a year earlier, Biz2Credit says.

"As banks have returned to the small-business credit market, the better qualified loan seekers are applying to banks for funding, thereby leaving credit unions with riskier candidates," Arora said in a release on Wednesday. "For the credit unions to bounce back in small business lending, they must improve their technology and expedite the loan process."

The biggest obstacle to getting Washington approval to raise the cap may come from the banking industry, specifically community banks which are worried about credit unions encroaching on their small-business turf.

Not only are community banks concerned about market share, but they also argue that credit unions should play on the level field as they do, specifically referring to the entities' non-profit statuses, meaning they are exempt from federal income taxes, as well as exemption from certain financial regulation, such as the Community Reinvestment Act.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs