SANTA ROSA – A bill pending in the U.S. House of Representatives would change the Federal Credit Union Act to allow for more business loans to be made to members.Since 1998, credit unions have operated with a statutory limit on member business loans of 12.25 percent of assets. HR 3380, the Promoting Lending to Small Business Act of 2009, introduced by Reps. Paul Kanjorski, D-Pa., and Ed Royce, R-Orange County, would raise that limit to 25 percent of assets.It would also increase from $50,000 to $250,000 the maximum total extensions of credit a borrower or associated member of a credit union may have before it is considered a business loan.“Banks can lend up to 100 percent,” said Brett Martinez, president and chief executive officer of Redwood Credit Union in Santa Rosa. “Credit unions are only at 12.25 percent of assets, and many credit unions are already against that cap.”"RCU is currently the top-ranked SBA lender in the North Bay, which shows that credit unions are still ready and willing to serve and lend to small businesses,” said Mr. Martinez. “If the lending cap for credit unions is increased, then we will be better able to support our local businesses with the funding they need to prosper and grow and, consequently, help to drive local economic recovery," he continued.A recent analysis by the Credit Union National Association showed that these reforms have the potential to create as many as 108,000 jobs and make available as much as $10 billion in credit to small businesses in the first year after enactment."During this time of economic uncertainty, many businesses, especially small businesses, are facing severe problems accessing credit in order to create and maintain jobs," said Rep. Kanjorski."HR 3380 would work to fix this problem by using credit unions as a resource to boost lending to small businesses and, as a result, encourage job creation without a cost to taxpayers. The bill has common sense reforms that ought to be incorporated into the jobs creation bill that the House will soon consider," he continued.Credit unions are encouraging Congress to include HR 3380 in a jobs bill that is currently being assembled.In a letter signed by the American Bankers Association and other banking associations, House Speaker Nancy Pelosi was urged to oppose inclusion of the bill in the jobs legislation.The banking industry has often cited credit unions' nonprofit status, which exempts them from taxes, as an unfair advantage.While loan-to-share ratio for overall loans can be up to 100 percent, having the business loan cap is keeping credit unions from making the amount of loans to small businesses they can.Redwood Credit Union Senior Vice President Robin McKenzie said credit unions were created originally for consumers, but over time members wanted business services, and the credit unions responded.Lifting the business loan cap has the support of small business and public policy groups that include the National Small Business Association, the National Farmers Union, the League of United Latin American Citizens, the National Association for the Self Employed, the National Cooperative Business Association, the National Cooperative Grocers Association and the Ford Motor Minority Dealer Association, among others.