“A Test of Political Wills”

Banking lobbying group’s argument against raising the MBL cap? Self-interest.


The Wall Street Journal published an article today on the showdown between credit unions and banks on legislation that could raise credit union’s business lending cap.  The article does a very good job of capturing both sides of the argument.

According to the article, banking lobbying groups argue “an increased cap would create a distorted competitive environment detrimental to community banks.”  The article goes on to more or less identify the “detrimental competitive environment” banks are afraid of, open competition. “Bank organizations say that even with proper oversight, giving credit unions more liberties to lend will have a detrimental impact on for-profit lenders, particularly the community lenders that serve neighboring businesses.”

It is understandable that banks would not want to have to compete with credit unions out of self-interest, but notice that their arguments aren’t justified based on the best interests of small businesses, instead they are arguing their position based solely on the well being of community banks.  Such arguments shouldn’t resonate with the public or with Congress.


May 27, 2010


  • Isn't it fair to say that anyone lobbying Congress — whether that be the ABA or CUNA — is doing so in their own best interests? If credit unions were brutally honest, they'd admit their motivations for increasing MBL are just as self-serving as the ABA's defensiveness.
    Jeffry Pilcher | TheFinancialBrand.com