WASHINGTON–The Member Business Loan Expansion Act has been introduced in Congress.
Co-sponsored by Reps. Vicente Gonzalez (D-TX) and Brian Fitzpatrick (R-PA), the legislation that would allow NCUA the flexibility to provide credit unions with relief from the 15-year general loan maturity limit under the Federal Credit Union Act and raise the de minimis value of what counts toward the member business lending (MBL) cap from $50,000 to $100,000, according to NAFCU, which said it supports the bill, as does CUNA.
In addition, the bill would amend the definition of "community financial institution" under the Federal Home Loan Bank (FHLB) Act to include credit unions.
"NAFCU applauds Congressmen Gonzalez and Fitzpatrick for introducing this bipartisan legislation to help credit unions better serve their local communities," said NAFCU President and CEO Dan Berger in a statement. "Credit unions have long sought to provide essential loans to small businesses – including many that are minority-owned or underserved – but have been constrained under the archaic 15-year loan maturity limit and outdated member business lending definitions.
‘Increased Flexibility’
"This new legislation will provide credit unions with increased flexibility to encourage the growth and success of small businesses. It will also ensure that more credit unions can offer affordable, high-quality mortgage loans to consumers by expanding eligibility for FHLB membership," Berger continued. "This important legislation will provide great benefit to credit unions and their communities and we urge its passage."
The trade group said extending credit unions' loan maturity limits under the FCU Act has been a key component of its advocacy for small businesses during the coronavirus pandemic, and that is has also long sought relief from the “arbitrary” member business loan cap for credit unions, as well.
CUNA Response
“Allowing credit unions to make loans with maturity limits of more than 15 years will help them provide more opportunities for members, including in the student loan space,” said CUNA President/CEO Jim Nussle. “The current maturity limit is a barrier keeping credit unions from providing additional affordable credit, and we thank Reps. Gonzalez and Fitzpatrick for their bipartisan work to solve this issue.”