Longer maturity limits for federal credit union loans would allow credit unions to better service members, CUNA wrote to Reps. Lee Zeldin (R-N.Y.) and Vicente Gonzalez (D-Texas) Monday. Zeldin and Gonzalez introduced a bill, H.R. 1661 that would amend the Federal Credit Union Act to provide NCUA with the flexibility to increase loan maturity limits for federal credit unions.
“One area that this change may impact is student lending. The ability to set a longer loan maturity for Federal credit union loans would provide student borrowers across the country with more opportunities for education that is more affordable both in the short and long term,” wrote CUNA President/CEO Jim Nussle. “Credit unions would also be able to better service loans for the agricultural sector and other businesses requiring significant cost of entry.”
Except for mortgage lending, Federally-chartered credit unions are prohibited by statute from making loans with maturity limits in excess of 15 years. Only Oklahoma has a similar restriction on state-chartered credit unions and no such constraint exists for banks.
NCUA released a proposal to extend maturity limits on certain loans such as home improvement loans in an effort to reduce regulatory burdens in August 2018.
CUNA commented on the proposal and supported an extension of the maturity limit.
CUNA Chief Advocacy Officer Ryan Donovan addressed the need to extend the maturity limits during his remarks Monday at CUNA’s Governmental Affairs Conference (GAC). The change is part of seven changes CUNA is seeking regarding Federal Credit Union Act modernization.