WASHINGTON—Bipartisan legislation introduced Tuesday would give federally chartered credit unions more flexibility in how long they can structure certain loans, a change supporters say would help level the playing field with banks and expand consumer financing options.
The Expanding Access to Lending Options Act, sponsored by Sens. Catherine Cortez Masto (D-NV) and Kevin Cramer (R-ND), would allow federal credit unions to offer loan maturities of up to 20 years for non-primary residence, business, and commercial loans. Current rules generally cap those loans at 15 years, except for primary home mortgages.
That limitation, credit-union advocates argue, puts federally chartered institutions at a competitive disadvantage. Banks and most state-chartered credit unions are not subject to the same maturity cap, often allowing them to offer longer terms that better match borrower needs—particularly for small businesses, education expenses, recreational vehicles, and other large purchases.
Cortez Masto said the change would be especially meaningful in rural and underserved areas, where credit unions often play an outsized role in local lending. Nevada has two federally chartered credit unions: Great Basin Federal Credit Union and Elko Federal Credit Union.
Scott Simpson, president and CEO of America’s Credit Unions, said the proposal addresses a long-standing structural issue facing federal charters.
“We thank Senators Cortez Masto and Cramer for understanding the importance of loan maturity flexibility that will enhance credit unions’ ability to offer loans at better rates and terms consumers want. Legislation like this enhances credit unions’ ability to help Americans make ends meet. America’s Credit Unions urges the Senate to pass this bill without delay,” Simpson said.
The Defense Credit Union Council said it support the the bill, calling it "common-sense, long-overdue modernization.”
“For decades, federal law has capped most credit union loans at 15 years, an outdated restriction that hasn’t changed in decades and no longer reflects today’s financial realities," said Anthony Hernandez, DCUC president/CEO. "By lifting this arbitrary 15-year cap and allowing maturities up to 20 years or more, Congress is giving credit unions the flexibility to better serve their 144 million members nationwide. This bill aligns credit union lending with common market practices and empowers us to fully meet our members’ needs, from homeownership to business expansion, with loan terms that make sense for them.
“By allowing longer-term loans, this bill will directly benefit consumers with more affordable financing options,” Hernandez added. “Extended terms mean credit unions can offer lower monthly payments to borrowers. That can be life-changing for a family on a tight budget or a small business owner looking to grow, a loan repaid over 20 or 30 years can significantly ease a borrower’s monthly cash flow. At a time of economic uncertainty, giving people the option of longer repayment periods provides much-needed financial relief.”
Hernandez addressed the bill's impact on the military.
“Servicemembers frequently relocate and often can’t obtain long-term financing from their credit union for a future retirement home unless it’s their primary residence,” Hernandez explained, referencing the limitation in current statute. “This bill changes that. By permitting 30-year loans on non-primary residences, it gives military members and veterans the chance to buy a home where they plan to live after service, even if they’re stationed elsewhere. In short, the legislation gives all credit union members – including those who serve our nation, more flexible and affordable borrowing options to improve their financial well-being.”