WASHINGTON (8/31/15)--Rep. Eric Swallwell (D-Calif.) is the latest legislator to write in support of the National Credit Union Administration’s member business lending (MBL) proposal. Swallwell, who has supported legislation to raise the MBL cap, said last week the rule would help expand small businesses that are seeking capital to grow and thrive.
“Credit unions can be an important source for small business capital, but they have been hampered by outdated regulations,” Swallwell wrote. “For this reason, I support NCUA’s proposed rule that would help increase the ability of credit unions to lend to small businesses.”
The proposal modernizes the NCUA’s MBL regulations, removing most of the restrictions not present in the Federal Credit Union Act. It also creates a new category of “commercial” loans. It would also remove all requirements that currently require waivers, including the personal guarantee requirement.
“Although it would take an act of Congress to raise the cap, this NCUA proposed rule would offer much-needed regulatory relief to help credit unions expand access to small business capital,” Swallwell wrote.
CUNA supports a number of provisions in the proposal but has raised several concerns as well. Most notably, CUNA has urged the agency to provide the guidance it will issue regarding the rule before it is finalized and to open the guidance up to public comment.
Credit unions have until the end of today to comment on the proposal.