WASHINGTON (6/19/15)--A proposed member-business lending (MBL) rule from the National Credit Union Administration that moves to a principles-based approach could be “a step in the right direction” in providing regulatory relief for credit unions, CUNA said.
“NCUA’s proposed rule to remove the guarantee requirement, eliminate the need for waivers, remove loan participations against the MBL cap and remove the loan-to-value limits seems like a step in the right direction,” said CUNA President/CEO Jim Nussle after Thursday’s open board meeting. (See related story: Modernized MBL rule proposed by NCUA.)
“Credit unions have been making business loans since their inception in the 1900s, yet their ability to lend to businesses is currently stifled,” he said, adding, “Today, more than 1,000 credit unions are at or near the arbitrary MBL cap put in place in 1998.”
The trade association is reviewing NCUA’s proposed principle-based rule. “We will be working with our members to assess the real regulatory relief this proposal offers, as well as conducting an economic analysis of the proposed cap calculation change,” Nussle said.
While CUNA appreciates the regulator’s interest in making changes to the MBL process, Nussle said, “We know that more can be done, which is why we’ll be seeking further action on behalf of our 100 million members.”
If credit unions weren’t constricted by the arbitrary MBL cap, he said, they would have the ability to lend more than $14 billion to small businesses, boosting the economy and helping small business owners create more than 152,000 jobs in just one year. (See related story: CUs ‘willing and able’ small business lender: NerdWallet.)
“NCUA’s action proves that the regulator wants more flexibility in MBL,” Nussle concluded. “It’s time for Congress to take action--CUNA and our state leagues will continue to work diligently on behalf of our members to seek further MBL change.”