Maryland credit unions outpacing banks

10/21/2011

According to the Credit Union National Association, commercial loans processed by credit unions are on the rise - exceeding both car loans and home mortgages, The Gazette reports.

Following the failure of the federal Small Business Lending Fund, credit unions are stepping up to the lending plate to doll out a significant amount of capital to banks. Of the $30 million allocated to the program, only $4 million was used.

Small businesses who struck out with federal programs are now turning to credit unions. CUNA notes that around 30 percent of CUs provided business loans in June, up from 25 percent in 2007.

"There is a need to be filled," CEO of Rockville, Maryland-based NIH Credit Union, told the news source. "While rates are at historic lows, many lenders are still constricting access to credit and making it difficult for many small businesses to grow."

In Maryland especially, CUs are granting funds to small businesses. For example, Bethesda-based Eagle Bancorp received $56.5 million from the SBLF, while Waldorf-based Tri-County Financial obtained $20 million, according to the U.S. Treasury Department.

The Wall Street Journal reports that around 33 percent of the nation's 7,500 credit unions offer small business loans, according to National Credit Union Administration data.