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Updated 03/12/2010 05:44 PM

Senator pushes for small business loans

By: Bill Carey

Washington is still trying to figure out just how to jump start an economy that seems to be on the rise, but producing few new jobs. Our Bill Carey tells us a New York senator says it's time to look beyond banks to the nation's credit unions.

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SYRACUSE, N.Y. -- New York's junior U.S. Senator came to Syracuse to help spread some important green paint. But soon after the St Patrick's Parade stripe painting, Kirsten Gillibrand was voicing a new plan to spread more of a different type of green. She met with small business leaders and the heads of local credit unions and she talked of a continued sense of public anxiety over the economy.

"The number one issue I hear, over and over again, is people saying, I'm worried about my job. I'm worried about my husband's job. I'm worried about being able to find a job," said Senator Kirsten Gillibrand.

It continues to be an economic recovery with very few jobs. The main engine for job production remains, small business. And one of the main problems confronting those businesses with plans for startup or expansion is the continuing resistance by major banks to make new business loans.

"The ability to get construction financing for any projects is essentially dead. The credit unions have been more aggressive than the banks lately," said Jacob Wright of Action Companies.

Gillibrand is joining with other lawmakers to change regulations facing credit unions and help them step up their help for businesses.

"The money they have in the bank, they can only lend up to 12.25 percent. That's the leverage limit. We want to double that to 25 percent. We also want to increase the minimum business loan, subject to this cap, from $50,000 to $250,000," said Gillibrand.

The estimate is that the change could free up $10 billion in new funding, helping to create 100,000 jobs. It's a plan with bi-partisan support that Gillibrand says should help speed it through Congress.

"So this is something that could actually be done this year, which I think would make a big difference," Gillibrand said.

And ease the anxiety over the future of jobs.