William J. Mellin, president/CEO of the New York Credit Union Association, on Wednesday called on state lawmakers to implement a series of steps to help New Yorkers facing economic hardships.
Mellin suggested that a state-guaranteed loan program be created that banks and credit unions can use to assist small businesses. He also proposed allowing state-chartered credit unions the opportunity to serve more New Yorkers and small businesses by modernizing the field of membership requirements, and allowing municipalities to deposit funds in credit unions.
Mellin’s remarks were made during a virtual public hearing before the state Legislature on the federal response to the economic impact of the COVID-19 pandemic on small businesses in New York state.
The intent of the hearing was for state committees to solicit feedback from the small business community and other stakeholders on the scope and implementation of the federal response to the COVID-19 pandemic, primarily the impact of the CARES Act, Paycheck Protection Program and Health Care Enhancement Act, and whether the federal assistance provided was adequate and accessible for small businesses across the state.
“While actions taken by the federal government have helped, there is much more that can be done for thousands of New Yorkers facing economic hardship,” Mellin said in his written testimony.
Guaranteed small business loans
Mellin suggested to legislators that the state lawmakers consider developing a guaranteed small business loan program, which would be administered through banks and credit unions.
To succeed, this guaranteed loan program would need to be “less restrictive and less bureaucratic” than the traditional SBA guaranteed loan program, Mellin said, explaining that reasonable underwriting criteria would also be required and borrowers would need to document how the funds would be used and applied.
“I can assure you that many New York credit unions would be anxious to participate in such a loan program, which would allow them to assist more of their members, small businesses and communities,” Mellin stated.
Temporary suspension of field of membership requirements
Temporary suspension of the field of membership requirements — or even a permanent expansion — for state-chartered credit unions that would include all of New York State would give credit unions the opportunity to help more members and small businesses, regardless of where they are located in the state, Mellin said.
“This action, which other states have already enacted, will result in zero cost to the state and will help our state and economy move forward,” Mellin said.
Allow municipalities to utilize credit unions
Finally, Mellin suggested that the state provide municipalities the opportunity to use their local credit union for their banking needs.
Adding that the issue has been in front of state lawmakers for many years and “every year politics get in the way,” Mellin questioned why New York wouldn’t give municipalities the same options that most other states now afford their local governments: “the option of using a financial institution that offers the best deal and will reduce their cost.”
The full video of yesterday’s hearing can be viewed below: