ARLINGTON, Va.—While MBL-related legislation currently before Congress would require a credit union to have at least five years of business lending experience to raise its MBL cap, a new study shows that the average time that a CU’s business lending program has been in place is 7.5 years.
NAFCU’s May Economic & CU Monitor, a monthly poll of the trade association’s membership, this month included a special MBL survey which also pointed out:
- The NAFCU-supported H.R. 1188 would increase the MBL cap for eligible credit unions from 12.25% of total assets to 27.5%. One criterion would be that a credit union has at least five years of business lending experience.
- Survey respondents said 24% of the loans in their portfolios are for non-owner-occupied, one- to four-unit dwellings, which another MBL bill, H.R. 1422, would exempt from the cap.
- H.R. 1333, also supported by NAFCU, would exempt business loans made to military veterans from the MBL cap. According to survey respondents, 18.2% said they have originated these types of loans in the past.
NAFCU’s survey also highlights that credit unions fill a unique niche in small business lending by providing smaller loans than banks on average. Only 27.2% of bank loans to small businesses were under $1 million compared to 85.4% for credit union respondents.
“Furthermore, a recent study from the Small Business Administration indicated that bank lending was largely unaffected by changes in credit union business lending, but that credit unions have the ability to offset declines in bank business lending during a recession.