Reps. Sander Levin and Donald Payne have signed on as cosponsors to legislation that would raise the cap on member business loans, bringing the total number of cosponsors to 101.
Levin (D-Mich.) is the top Democrat on the House Ways and Means Committee and Payne (D-N.J.) serves on the Education and Foreign Affairs committees.
The legislation, sponsored by Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) would raise the cap on member business loans from 12.25% of assets to as much as 27.5% of assets. A key House subcommittee held a hearing on the bill on Oct. 12.
This follows a similar hearing by the Senate Banking Committee in June.
NCUA Chairman Debbie Matz endorsed the measure during testimony at both hearings and said if it passed the agency would expand its regulation of small business lending but she hasn’t given details about what that would entail.
Sen. Mark Udall (D-Colo.) has introduced a companion bill in that chamber and it has 20 cosponsors. Both measures require that 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 measure is far short of being cosponsored by a majority of members in either chamber, which is the standard tipping point for moving legislation through the House. The House has 435 members and the Senate has 100.