The Connecticut unemployment rate currently mirrors the national average of 9.1%. With public officials seemingly short on solutions to the persistent problem, some businesses in the private sector are stepping forward with their own ideas that could help improve pockets of the economy and labor market.
is planning such a move that could boost job creation in parts of the state. In September, joining a handful of other Connecticut credit unions, Nutmeg intends to begin commercial lending. By October, it will also offer business deposit accounts, including checking.
Nutmeg president John Holt asserts that commercial lending by credit unions can be a vehicle to produce new jobs.
“The more institutions that offer business loans, the more we can infuse the economy with dollars that companies can invest and create new positions.”
Commercial banks have traditionally protested credit union forays into business lending on the grounds that the non-profit credit unions possess a competitive edge, due to their tax-exempt status. Banks also assert that credit unions are subject to looser regulatory requirements which provides them additional, unfair advantage.
Holt disputes that characterization.
“I don’t believe we have an advantage. We can only do business in Tolland, Hartford, and Middlesex County and can only lend 12.5% of our assets commercially,“ he argued, outlining the legislative constraints the credit union faces.
Nutmeg supports a national push among credit unions to raise the 12.5% level. Increased commercial-lending capacity would allow credit unions to meet the needs of companies seeking to expand in areas like capital or infrastructure. This kind of growth will lead to further new jobs, Holt maintains.
Holt concedes the obvious growth-interests in Nutmeg’s move.
“We want to be a full-service credit union and meet our customers’ needs. Businesses have been asking for a long time when we were going to start working with them.”
In response to individuals’ reluctance to borrow in present economic conditions, Nutmeg will also add to its “suite of lending products,”as Holt calls it, available to personal account holders. By October, individuals who desire items like cosmetic procedures may be able to pay for them through newly-offered “lifestyle loans.”
Nutmeg will further increase its accessibility by opening a branch inside the Newington Pricechopper. The credit union is the first in Connecticut to place one of its divisions inside a supermarket, another practice that has historically been the province of banks.