WASHINGTON — Two members of Congress used their speeches at NAFCU’s Congressional Caucus to deliver news that advances the cause of raising the cap on member business loans.
Rep. Shelly Moore Capito, chairman of the House subcommittee on financial Institutions and consumer credit, said her panel will hold a hearing sometime in October on the legislation as part of efforts to look at ways to jumpstart the economy and create more jobs.
Sen. Rand Paul (R-Ky.) said he would co-sponsor the measure in the Senate.
Though Capito (R-W.Va.) will chair the hearing, she hasn’t committed to supporting the measure.
In an interview with Credit Union Times after her speech, she said, “I will listen to what everyone has to say. I want to have some questions answered, including how many credit unions are coming up against the cap.”
The measure, which would raise the cap on member business loans from 12.25% of assets to up to 27.5% of assets, is sponsored in the House by Rep. Ed Royce (R-Calif.) and Rep. Carolyn McCarthy (D-N.Y.). Sen. Mark Udall (D-Colo.) has sponsored a companion bill in the Senate.
Paul didn’t mention the issue during his speech, which focused on broader budget and spending issues, but announced his support for the measure in response to a question from the audience.
He said he had always supported raising the cap and checked with his staff and it was an oversight that he hadn’t signed on yet.
Under the bill, 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.
The House bill has 69 co-sponsors and a companion bill by Sen. Mark Udall (D-Colo.) has 21 co-sponsors.
In June, the Senate Banking Committee held a hearing on Udall’s bill, and NCUA Chairman Debbie Matz testified in support of it.
Capito also said her panel has passed several pieces of legislation that would reduce the regulatory burden on credit unions and other financial institutions.
These measures, which include a restructuring of the Consumer Financial Protection Bureau, will “give some sanity to some of the regulations” that are out there, she said during her speech.
During his speech, Paul said Congress has to make serious progress toward tackling entitlements if the country is going to solve its long-term debt problem.
Paul, who was elected to the Senate last year, was supported by several credit union organizations during his campaign.