WASHINGTON (7/2/15)--Comments on the National Credit Union Administration’s member business lending (MBL) proposal are due to the agency Aug. 31, according to the proposal’s publication in the Federal Register Wednesday. CUNA is also seeking comments from its member credit unions through Aug. 21.
The proposal was put forth at the NCUA’s June 18 board meeting. The agency believes the rule will serve to remove arbitrary MBL limits and replaces them with a principles-based regulatory approach.
The proposed rule removes or modifies a number of MBL restrictions, including: personal guarantee requirement, 80% limit on loan-to-value ratios; limit on unsecured MBLs; requirement that staff have two years of direct experience; detailed limits on construction and development loans; and the 15% of net worth limit on loans to one borrower, which will now increase to 25% if the additional 10% is supported by readily marketable collateral.
CUNA President/CEO Jim Nussle called the proposal a “step in the right direction,” but said that more can be done, and that CUNA will be seeking further regulatory relief, including legislation to lift the cap of 12.25% of a credit union’s assets.