Put us in, Coach! Credit Unions can fill the American Main Street Credit Gap
Since cooperation sits at the foundation of our American origin story, let’s use it to fund America’s next chapter. Credit union members are inside shareholders who have the collective ability to solve a serious credit gap.
Far too many promising businesses come up short getting approved for $50,000–250,000 loans. These businesses not only give our communities local character, they build economic resilience here at home when a restaurant expands to a new location, a builder purchases another piece of heavy equipment, or a consultant hires a second employee.
At national scale, megabanks often pass on these loans because the underwriting cost outweighs the return to outside investors. Community banks can step into this space (and we cheer them when they do), but they alone cannot fill the need. Demand still outstrips supply.
Credit unions aren’t alternatives to traditional financing. We are the Main Street lenders:
- Where small firms actually get approved. In the Federal Reserve’s latest Small Business Credit Survey, applicants at credit unions and small banks were more likely to be approved for at least some financing than applicants at other sources, and they reported the highest satisfaction with the experience.
- Who show up for even the tiniest businesses. During PPP, nearly 45% of credit unions participated and delivered ~362,000 loans totaling $15.1B. Our average PPP loan was just $47k in 2020 and $34k in 2021—proof that credit unions reached the smallest firms that big-balance-sheet lenders often overlook.
- With real commercial capacity. Credit union commercial loans on the books reached approximately $183B in Q2 2025—up 11.5% year-over-year—demonstrating both demand and the system’s ability to serve it prudently. By contrast, US banks hold about $2.88 trillion in C&I loans outstanding
Antiquated rules that preserve the status quo are blocking credit unions from doing even more to fill that Main Street credit gap. Rules that were designed to benefit outside shareholder banking shouldn’t keep inside-owned institutions from serving their main street communities. And deeply entrenched corporate and political interests have little appetite for change. By law, most business loans over $50,000 count against an aggregate limit—these thresholds were set in the mid-1990s and have never even been indexed to inflation. To widen this credit gap even more, the law caps total business lending volume to a point that forces many credit unions to either turn away creditworthy local businesses or avoid business lending altogether. Why? Because current law makes it nearly impossible for them to build a viable business lending program.
Put us in, Coach!
Modernizing the credit union business lending laws is good for all of us. Let credit unions do what we do best: finance Main Street. With the help of credit unions, we can fill the sub-$250k credit gap—and fuel American innovation. Raise the $50,000 de minimis to a realistic level and raise the cap so safe, well-capitalized credit unions can meet members’ demand in their own communities. In a moment when policymakers champion American innovation and American-made businesses, don’t sideline the lenders who know Main Street America best. Keeping outdated limits in place hurts ordinary Americans who are simply trying to live the American Dream.
As Always,
Bruce
