WASHINGTON—Legislation that would raise the cap on member business loans for federal credit unions has once more been introduced in Congress. Rep. Ed Royce (R-CA) and Rep. Greg Meeks (D-NY) are cosponsoring the “Credit Union Small Business Jobs Creation Act of 2015.” Both serve on the House Financial Services Committee. The bill would raise the credit union member business loan cap to 27.5% from 12.25%. The legislation has appeared in almost every Congress since the cap was put in place with 1998’s Credit Union Membership Access Act.
The legislation would allow the NCUA Board to approve an application by an insured credit union for a 27.5% MBL cap under certain conditions, including:
- The the credit union has met at least 80% of its current cap for the past four consecutive quarters.
- it is classified as “well capitalized.”
- It can demonstrate at least five years of experience of sound underwriting and servicing of MBLs.
This bill, like previous versions, would cap growth in MBL portfolios to no more than 30% a year for credit unions authorized for the higher cap, noted NAFCU in its analysis.
“We thank Reps. Royce and Meeks for their continued commitment to credit unions and their confidence in credit unions’ ability to help small business,” said NAFCU CEO Dan Berger. “This bill would help credit unions do more to meet the credit needs of their member small businesses and, in turn, help grow jobs. We look forward to working toward its enactment.”
CUNA CEO Jim Nussle issued a statement saying, “I thank Reps. Royce and Meeks for their strong leadership and support of credit unions and small businesses. This common sense legislation would allow credit unions to do so much more to help small businesses grow, creating jobs for hard working Americans and boosting our economy.”
CUNA has estimated that raising the cap would create 140,000 new jobs and allow credit unions to lend an additional $13 billion to small businesses, with no cost to taxpayers.