CUNA supports NCUA’s proposal to provide regulatory relief through amendments to regulations regarding loans and lines of credit to members. CUNA filed its comment letter on the proposal Tuesday.
“CUNA supports NCUA’s efforts to streamline and organize regulations applicable to credit unions to improve clarity and make compliance easier,” the letter reads. “When supervisory inconsistencies occur among the supervisory office regions, a disparate regulatory landscape exists, rendering challenges and disparities for credit unions. CUNA appreciates the agency’s willingness to engage the credit union industry in dialogue to address rule transparency.”
CUNA also called on NCUA to extend the maturity limit of one-to-four family, non-owner occupied real estate loans past the current 15 years. While such loans were taken out of the member business lending cap due to the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155), the existing maturity limit is still applicable for those loans.
“Because credit unions are uniquely subject to both lending and maturity limit caps (whereas banks are not), we support and propose an extension of the maturity limit available for such loans, as this change is necessary and good public policy,” the letter reads. “CUNA would support any agency efforts to remediate this imbalance. Further, the 15-year maturity limit restricts how credit unions can best serve their members relative to FNMA and FHLMC investor requirements, forcing credit unions to send members to a mortgage broker or bank, which can offer a term beyond 15 years, and requiring members to pay higher fees and rates or could cost the credit union a member relationship.”
The letter also requests NCUA codify that loans and participations backed by the U.S. government (such as those made by the Small Business Administration’s 7(a) program) remain exempt from the member business loan cap. Currently such loans are exempted from the cap by discretionary determination of NCUA’s regional directors.