RALEIGH, N.C. (3/18/16)—The Carolinas Credit Union League (CCUL) is strongly advocating for streamlined state member business lending (MBL) rules.
CCUL President/CEO John Radebaugh recommended to a North Carolina legislative panel that the North Carolina Credit Union Division adopt streamlined business lending regulations akin to the National Credit Union Administration’s (NCUA) newly adopted rules.
The panel, co-chaired by state Sen. Tom Apodaca (R-Henderson) and state Rep. David Lewis (R-Harnett), met for the first time March 9 and is charged with identifying and addressing obstacles for small business’ access to credit and capital.
Radebaugh offered that credit unions' origins lie in addressing the unmet credit needs of small businesses, referring to the creation of North Carolina’s first cooperative for farmers at Lowe's Grove in Durham County in 1916.
Currently, more federally chartered credit unions engage in small business lending than state chartered credit unions. Radebaugh said that an update to the state charter's MBL rule--similar to modernizations approved in February by the NCUA--could make such lending more attractive for state-chartered credit unions, which would increase available capital to the state's small businesses.
The CCUL leader also discussed the obstacles that restrictive field-of-membership rules can pose in areas where small business start-ups could not identify a credit union they could join that also offered business loans.
On the federal level, the NCUA voted 3-0 to amend its MBL rule to provide federally insured credit unions with greater flexibility and individual autonomy in safely and soundly providing business loan services to their members.
The Credit Union National Association worked closely with the agency to affect improvements to the original proposal and CUNA President/CEO Jim Nussle commended the agency for its actions to remove regulatory barriers for credit unions with its modernized MBL rule.
The NCUA also has proposed major field-of-membership improvements strongly supported by CUNA.