WASHINGTON–The credit union trade groups continue to work Congress as they seek to nibble around the edges of the member business loan (MBL) cap in place for federal credit unions, which has now been in place for more than two decades. But will the cap itself ever be removed?
Not anytime in the near future, according to Brad Thaler, VP-legislative affairs with NAFCU.
Instead, credit unions continue to work to get carve-outs from the MBL cap, which was included in in 1998’s Credit Union Membership Access Act at the behest of the banking trade associations.
For example, credit unions succeeded in having loans on non-owner occupied homes exempted from the cap.
There are also efforts to have the de minimis cap on loans that are exempted raised from $50,000 to a higher amount.
“Fifty-thousand dollars in 1998 is not $50,000 in 2022,” said Thaler. “There is a good argument to raise that so lines of credit and smaller loans don’t count toward the cap. We keep pushing for ways to lift it where it’s just common sense. But Congress is not going to eliminate it.”
The most recent example of credit unions seeking to get an exemption from the cap are loans to women- and minority-owned businesses.
As CUToday.info reported here, so-called MWBEs often face barriers when it comes to access to credit and financial services, as CUNA wrote in a letter to the House Financial Services Subcommittee on Diversity and Inclusion.
The Message in Washington
When it comes to lobbying Congress credit unions will out in force in two weeks when CUNA again hosts its Governmental Affairs Conference (GAC) in Washington. Thaler said he expects credit unions to continue to “tell the story of the good works credit unions have done and are doing during the pandemic.”
Attendees, he said, should focus on the “value they are bringing to their members, particularly during economic uncertainty. They should push for common sense regulation and make sure as innovation builds in the marketplace that credit unions have a fair field to compete. And that means reining in unregulated actors and having the tools, as well.”
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