UPDATE 1-US lawmakers drafting credit union expansion bill
(Adds name of credit union trade group, name of draft bill)
By John Poirier
WASHINGTON, Feb 27 (Reuters) - A key U.S. lawmaker said on Tuesday bipartisan legislation is being drafted to allow credit unions to expand their field of membership and increase loans to small businesses.
Rep. Paul Kanjorski, a Pennsylvania Democrat who chairs the House Financial Services subcommittee on capital markets, told a credit union trade group's annual conference that he hopes a bill will be introduced by late spring.
The measure is likely to face stiff opposition from commercial banks who think credit unions have already expanded beyond their traditional definitions of membership. Banks have previously tried to get Congress to remove the tax-exempt status of credit unions.
Kanjorski repeated his support for exempting credit unions from being taxed like commercial banks. "We're not going to tax credit unions," he said to a standing ovation at the conference hosted by the Credit Union National Association.
Support for credit unions was also offered at the conference by Senator Joe Lieberman, a Connecticut independent, House minority whip Roy Blunt, a Missouri Republican, and House Majority Leader Steny Hoyer, a Maryland Democrat.
Lieberman, who said he is a member of a credit union in the U.S. Senate, said he and other people support the planned legislation because it helps lower costs for its members and provides more loans for businesses.
"I'm a real believer in the credit union system," said Lieberman, a former Democrat who was supported by credit unions in his recent reelection effort.
The planned bill, which is expected to be co-sponsored by California Republican Rep. Ed Royce, would allow credit unions to increase loans to businesses to between 20 percent to 25 percent of their assets from the current level of slight more than 12 percent, Kanjorski said.
The bill would be called the Credit Union Regulatory Improvement Act (CURIA) and also allow credit unions to expand their field of membership to underserved communities throughout the country. (Reuters Messaging: john.poirier.reuters.com@reuters.net; E-mail:john.poirier@reuters.com +1 202 898 8399))
