House Members Reintroduce CU Apartment House Loan Legislation
Three House members have reintroduced legislation that would allow credit unions to make loans that finance the purchase of small apartment buildings.
Similar legislation has been introduced in past Congresses, but have not passed.
Known as the Credit Union Residential Loan Parity Act, the legislation was introduced by Reps. Ed Royce (R-Calif.), Jared Huffman (D-Calif.), Don Young (R-Alaska), and Peter DeFazio (D-Ore.).
The bill would remove loans made for the purchase of non-owner occupied buildings consisting of between one and four dwellings from the member business loan cap imposed on credit unions.
The legislation also would impose strict underwriting and servicing requirements for these loans.
The House sponsors estimated that the legislation would allow credit unions to lend an additional $11 billion to small businesses.
CUNA and NAFCU have announced their support of the legislation.
The bill addresses a disparity in federal law, said CUNA President/CEO Jim Nussle.
“When a bank makes a loan to purchase a 1-4 unit non-owner occupied residential dwelling, the loan is classified as a residential real estate loan; however, if a credit union were to make the same, it would be classified as a business loan and therefore would be subject to the cap on member business lending,” Nussle said.
NAFCU President/CEO B. Dan Berger also endorsed the legislation.
“We strongly urge other members of Congress to support and cosponsor the bill, which would provide credit unions with more flexibility within their lending cap and help them better serve small business owners critical capital needs,” he said.