Rep. Carolyn Maloney (D-N.Y.), a senior member of the House Financial Services Committee, announced at this week’s credit union regulatory burden hearing she plans to introduce a bill that would exempt loans from the credit union member business lending cap that are made after federally declared natural disasters.
In a release, the congresswoman said the move would inject much-needed funds into local communities when they need it most.
“We all know Superstorm Sandy caused enormous destruction throughout the Northeast, and wildfires, hurricanes and tornados have wreaked similar havoc across the country,” Maloney said after the hearing on Wednesday.
“Federal disaster assistance that flows after each declaration of a disaster is essential but not sufficient to get a region back on its feet. I’ve heard from many small businesses about their struggle to recover from Sandy,” Maloney said.
The bill would exempt member business loans from the 12.25% of assets cap for a period of up to five years after a natural disaster declaration.
“Exempting these loans will open up a new source of credit for struggling small businesses and untie the hands of credit unions that want to provide that assistance,” she said.
“Credit unions are key members of the communities they serve and want to be there for small businesses who need assistance recovering from natural disasters. This bill will provide businesses a source of capital to help them rebuild and recover,” the New York Democrat said.