WASHINGTON--A bipartisan group of lawmakers, led by Rep. Scott Fitzgerald (R-WI), introduced legislation in the House Thursday to extend the credit union loan maturity limit to 20 years. The bill, titled the Expanding Access to Lending Options Act, would also grant the NCUA authority to further extend loan terms for certain types of credit union loans.
Both America's Credit Unions and the Defense Credit Union Council wrote to the House Financial Services Committee Thursday in support of the legislation.
DCUC Chief Advocacy Officer Jason Stverak outlined in DCUC’s letter why the bill is significant for credit unions.
Stverak noted the bill modernizes the outdated 15-year limit on federal credit union loans – “A cap that has remained unchanged for decades and no longer reflects today’s financial realities. By giving the National Credit Union Administration flexibility to extend loan maturities (up to 20 years, versus the old 15-year cap), your legislation updates an antiquated restriction and aligns credit union lending with common market practices. In short, it removes an arbitrary constraint that has been limiting credit unions’ ability to fully meet their members’ needs. We strongly support this long-overdue modernization of credit union loan maturity limits.”
Importantly, the Expanding Access to Lending Options Act will directly benefit credit union members, he explained.
“By allowing longer-term loans, it enables credit unions to offer lower monthly payment options for consumers, making large purchases or investments more affordable. For example, a loan that can be repaid over 20 years instead of 15 can significantly reduce a borrower’s monthly payment burden,” Stverak wrote. “Additionally, the bill removes the requirement that mortgage loans from credit unions be limited to a member’s primary residence. Credit union members would have more accessible mortgage options, including the ability to finance second homes or other properties through their credit union – an option they often lack today. This flexibility is especially valuable to military and veteran families, whom our defense credit unions proudly serve.
“Servicemembers frequently relocate and may not settle permanently in the area of their last duty station; under current law they’ve been unable to obtain long-term financing from their credit unions for a future retirement home unless it’s their primary residence,” continued Stverak. “Your bill changes that. It allows longer-term loans on non-primary residences, which would help military members purchase a home in the community where they plan to live after service, even while stationed elsewhere. In short, your bill gives all credit union members – including those in the military – more flexible and affordable borrowing options to improve their financial well-being.”
America’s Credit Unions President/CEO Jim Nussle said, “Economic uncertainty makes managing finances difficult. With the introduction of legislation to provide credit unions with loan maturity flexibility, Reps. Fitzgerald, Fitzpatrick, Sherman, Meuser, Kim, Vargas, and Timmons are giving 142 million Americans much-needed financial relief. This bill enhances credit unions' ability to offer loans at rates and terms that fit their members’ needs. Credit unions are a safe haven for Americans trying to make ends meet and invest in their future. We thank the lawmakers for introducing this bipartisan legislation, and we urge the House to quickly advance it.”
ACU pointed out the bill combines provisions from two bills supported by America’s Credit Unions that were introduced last Congress. Cosponsors of the bill include Reps. Juan Vargas (D-CA), Brad Sherman (D-CA), Young Kim (R-CA), Brian Fitzpatrick (R-PA), William Timmons (R-SC) and Dan Meuser (R-PA).