Free the Economy, Free the Credit Unions

For now at least, the House Republicans' regulatory reform agenda panders to the base on hot-button issues rather than works to make real regulatory reforms with a chance of going into force. If they actually want to fix the economy, House Republicans need a broader agenda. The items won't be exciting or base friendly, by they have a much better chance of making a difference now.

Here's one such item: credit union lending caps.

Right now, credit unions, democratically governed lending non-profits with limited fields of membership, can't lend more than 12.25% of their assets to businesses that join them. A lot of members of Congress--most of them Democrats--want to raise this cap to 27.5%. Total elimination of the cap would be a much better and economically helpful idea.

Banks, not wanting the competition, hate the idea. But it makes a lot of economic sense: credit unions have funds they would gladly lend to businesses at competitive interest rates if the government would simply let them do so. More business loans would create jobs and improve the economy.

Will this solve economic problems alone? Nope. But the credit union lending limitation is a good example of a burdensome and pointless regulation that holds back the economy. If Republicans want to show they are serious about regulatory reform, they need to add it (and other like measures) to their regulatory reform agenda as soon as they can.