BALTIMORE, Md. - Now that the NCUA Board has approved Maryland's member business lending rule, the state Division of Financial Regulation is turning its attention to private insurance for the state's 11 credit unions. Maryland became the fourth state to have an NCUA-approved MBL rule. The agency approved the proposed rule at its regular Nov. 15th board meeting. Commissioner Mary Louise Preis of the Maryland Division of Financial Regulation said member business lending was part of the state's new credit union act that was written by the "Task Force to Study the Modernization of Credit Union Law" and passed earlier this year. Assistant Commissioner Joe Rooney in charge of credit union supervision for the State of Maryland led the crafting of the MBL rule. He explained that there actually had been an earlier version of an MBL regulation on the books since 1989 that was written when the state went through an s&l crisis and many s&l's converted to credit unions. "But no credit union took advantage of the member business lending policy," he said. Rooney said the state's new MBL regulation is substantially similar to NCUA's. Among the provisions of the rule: * it allows members who borrow for construction and land development projects to have a lower equity interest in the project being financed than MBL rules require for federal credit unions: * state-chartered CUs can also make business loans to their officers as long as certain conditions are met. NCUA prohibits this for FCUs; * it prohibits CUs whose net worth is below 7% or whose CAMEL composite ratings is four or five, from making any member business loan. Rooney said each SCCU will also have to have a written MBL policy, which will be reviewed during the CU's exam. NASCUS President Doug Duerr called the NCUA Board's action, "a triumph for state-chartered credit unions across the country." He said the agency's approval "indicates yet another state has crafted a rule which simultaneously meets the needs of Maryland's credit unions and protects the National Credit Union Share Insurance Fund from unwarranted risk." The Division of Financial Regulation will now turn its attention to gaining the right of SCCUs to have private insurance through other insurers besides Credit Union Insurance Corp. (CUIC). The state General Assembly will take up legislation when it convenes in its next session, January-April 2002 that will set up the parameters for private insurers to be approved by the commissioner. CUIC has provided private insurance to SCCUs in Maryland since 1975. That will sunset once the state legislature passes the measure allowing for other private insurers in the state for SCCUs. - firstname.lastname@example.org
Private insurance next on tap for Maryland SCCUs
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