NCUA Chairman Debbie Matz is the lead witness in Thursday’sSenate Banking Committee hearing on legislation to raise the cap onmember business loans for credit unions.

CUNA President Bill Cheney and NAFCU Chairman Michael Lussierwill also testify on behalf of the legislation. IndependentCommunity Bankers of America Executive Committee Member Noah Wilcoxand ABA Chairman Stephen Wilsonare slated to testify against themeasure.

Matz has supported raising the hike but has promised to step upthe agency’s oversight of such lending.

Under the bill by Sen. Mark Udall (D-Colo.), eligible credit unions willbe able to increase their small business lending to 27.5% of totalassets, at a rate of growth not to exceed 30% a year.

Credit unions must be well-capitalized, be at or above 80% ofthe current cap, have five or more years of member business lendingexperience and be able to demonstrate sound underwriting andservicing.

If a credit union’s net worth ratio falls below thewell-capitalized requirement (currently 7%), it would have to stopmaking new business loans.

Currently, business loans of $50,000 or more count toward thecap. CUNA and NAFCU have tried to raise that to $250,000 but thatis not part of Udall’s bill or a companion bill that has beenintroduced in the House.

The House bill is sponsored by Reps. Ed Royce (R-Calif.) andCarolyn McCarthy (D-N.Y.).

The hearing is scheduled to take place at 10:00 a.m.