Bipartisan Senate bill would raise FCU loan maturity limits

March 4, 2020

Sens. Tim Scott (R-S.C.) and Catherine Cortez Masto (D-Nev.) introduced a CUNA-supported bill Wednesday that would raise federal credit union loan maturity limits on non-mortgage loans from 15 to 20 years, the Expanding Access to Lending Options Act. CUNA wrote a letter of support of Scott and Cortez Masto Wednesday.

CUNA strongly supports efforts to raise the current 15-year limit for non-mortgages, and has called on both NCUA and Congress to make such a change.

“We thank Sens. Scott and Cortez Masto for their bipartisan legislation that would open increased consumer access to safe and affordable credit union loan products,” said CUNA President/CEO Jim Nussle. “By reducing barriers to credit for those borrowers seeking longer term loans, this legislation will help credit unions provide new opportunities for those seeking to write their own financial futures.” 

CUNA, along with the Carolinas Credit Union League and the Nevada Credit Union League, directly engaged with legislators on the importance of this bill. Scott announced the bill during last week's CUNA Governmental Affairs Conference (GAC) during a meeting with the Carolinas Credit Union League. 

“Having served as a volunteer for Heritage Trust FCU, Senator Scott understands how unnecessary barriers inhibit the ability of credit unions to serve their members," Carolinas League President/CEO Dan Schline said. "We appreciate his leadership in announcing this legislation that will provide credit unions greater flexibility by addressing the loan maturity limit in the Federal Credit Union Act. We thank Senator Scott and his team for their efforts, and we look forward to continuing to work with South Carolina credit unions and our partners at CUNA to advance the legislation.”

“This bill is another modernization that strengthens the dual charter system and bring more opportunities for credit unions to change their member's lives,” said Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues.

Federally chartered credit unions are prohibited by statute from making loans with maturity limits in excess of 15 years except for mortgage lending. Only one state (Oklahoma) has a similar restriction on state-chartered credit unions. No such constraint exists for banks.

A similar, CUNA-supported bipartisan bill was introduced in the House last year by Reps. Lee Zeldin (R-N.Y.) and Vicente Gonzalez (D-Texas).

This bill comes as multiple pieces of credit union governance modernization legislation introduced during CUNA Governmental Affairs Conference.

  • On Wednesday, Reps. Katie Porter (D-Calif.) and Mark Amodei (R-Nev.) introduced the Board Governance Modernization Act during Porter’s remarks on the GAC mainstage.
  • Sens. Richard Burr (R-N.C.) and Thom Tillis (R-N.C.) introduced S.3326, the Credit Union Fairness Act, on Tuesday.
  • Sens. Ben Sasse (R-Neb.) and Tina Smith (D-Minn.) introduced S. 3323, the Credit Union Governance Modernization Act, on Monday.