WASHINGTON (3/19/15)--Rep. Ed Royce (R-Calif.) reintroduced the CUNA-supported Credit Union Residential Loan Parity Act Wednesday (H.R. 1422).
Under current law, when a bank makes a loan to purchase a 1-to-4 unit, non-owner occupied residential dwelling, the loan is classified as a residential real estate loan. However, when a credit union makes the same loan, it is classified as a business loan and is therefore subject to the 12.25%-of-assets cap on member business lending under the Federal Credit Union Act.
"I thank Rep. Royce for his continued support to help bring parity to residential loans made by credit unions," said Jim Nussle, president/CEO of CUNA. "This much needed legislation would enable credit unions to better serve members who purchase rental properties and contribute to the availability of affordable rental housing."
When introducing the bill, Royce said, "At a time when the construction sector is still faltering during a tepid economic recovery, policymakers should be doing everything possible to encourage more private sector investment in housing.
"The Credit Union Residential Loan Parity Act means billions of additional dollars of capital for small businesses and increased competition between lenders, all of which benefits consumers."