The Senate Banking Committee is expected to hold a hearing later this month on legislation by Sen. Mark Udall that would raise the cap on member business loans up to as much as 27.5%, several sources told Credit Union Times on Thursday.
The sources, who requested anonymity, said the panel is likely to hold a hearing during the week of June 13. A committee spokesman didn’t immediately return a request for comment.
Credit unions have been fighting for this bill for several years and thought they came close last year but it was thwarted by procedural issues. Also, some senators were concerned that the bill, which has 18 cosponsors, hadn’t been the subject of a hearing in that chamber.
Under the bill by Udall (D-Colo.), eligible credit unions will be able to increase their small business lending to 27.5% of total assets, at a rate of growth not to exceed 30% a year. Credit unions must be well-capitalized, be at or above 80% of the current cap, have five or more years of member business lending experience and be able to demonstrate sound underwriting and servicing. If a credit union’s net worth ratio falls below the well-capitalized requirement (currently 7%), it would have to stop making new business loans.
Currently, business loans of $50,000 or more count toward the cap. CUNA and NAFCU have tried to raise that to $250,000 but that is not part of Udall’s bill or a companion bill that has been introduced in the House.
The House bill, sponsored by Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.), has 33 cosponsors.
