We applaud NCUA Board MemberMichael Fryzel for his leadership and call for the agency to amendthe regulations on member business lending . This is indeed anopportune time for the NCUA to proactively pursue amending the MBLregulations that have choked credit unions' ability to help smallbusinesses.

The suggestions Mr. Fryzel highlighted are key parts of NAFCU's“dirty dozen” list of regulations that should be amended oreliminated. Additionally, we believe the NCUA should use itsauthority granted in the Federal Credit Union Act to provide anexception to the limitations on member business loans for thosecredit unions that have a history of making MBLs to their members.

We believe credit unions that have had a successful MBL programin place for five years or longer should be sufficient to satisfythe statutory requirements. The NCUA should set this standardand make the exception available to all credit unions.

The NCUA should also issue appropriate guidance for compliancewith these exceptions. By adopting this change, the agencywill be able to increase the availability of safe and sound MBLs inthe market, which will benefit credit unions' members as well asthe economy and the industry.

Additionally, NAFCU continues to hear from its members that thewaiver process is complicated and inefficient. Due to this,many credit unions have been unable to extend solid loans to theirsmall-business members. These loans may have been lost tocompetitors or never provided at all.

The process to obtain a waiver should not be so unreasonablydifficult that it prevents credit unions from serving theirmembership effectively. We believe the NCUA's current detailed list of available waivers should be replaced with amore flexible waiver provision that would allow a credit union toapply for, and obtain, a waiver from a non-statutorily required MBLregulatory requirement.

Also, NAFCU understands that the NCUA expects credit unions topractice appropriate risk assessment and monitoring. However, thewaiver requirement that credit unions have a five- yearrelationship with the borrower and current principals creates anundue burden that doesn't necessarily promote good underwriting orrisk assessment. We urge the NCUA to reconsider this requirementfor obtaining a waiver of the personal guarantee requirement.

Credit unions have demonstrated their support for small businessconsistently. A study commissioned by the SBA's Officeof Advocacy in 2011 found that bank business lending waslargely unaffected by changes in credit unions' business lending,and credit unions' business lending can actually help offsetdeclines in bank business lending during a recession. Thestudy showed that during the 2007-2010 financial crisis, whilebanks' small business lending decreased, credit union businesslending increased as a percentage of their assets. Andthey continued to do so to the best of their ability under thecurrent restrictive regulatory framework.

Ultimately, while Congress continues to contemplate thepossibilities of MBL, the NCUA has the chance to be a true championfor credit unions, well within its regulatory purview, and allowcredit unions to fully serve Main Street and their small businessmembers.

As Chairman Matz has noted in the past, MBLs can be an importantway to diversify a portfolio. Credit unions have proven theirmettle and commitment to their members through the financialcrisis, and NCUA's fourth-quarter 2013 call report underscore thesolid footing of the industry.

Now is the time to allow credit unions to build on their successand allow them to fulfill their mandate to serve theirsmall-business members to the best of theirability. The fair and reasonable changes suggestedby Mr. Fryzel would be an important a step in that direction.

B. Dan Berger

President/CEO

NAFCU

Arlington, Va.