X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

BALTIMORE, Md. – Now that the NCUA Board has approved Maryland’s member business lending rule, the state Division of Financial Regulation is turning its attention to private insurance for the state’s 11 credit unions. Maryland became the fourth state to have an NCUA-approved MBL rule. The agency approved the proposed rule at its regular Nov. 15th board meeting. Commissioner Mary Louise Preis of the Maryland Division of Financial Regulation said member business lending was part of the state’s new credit union act that was written by the “Task Force to Study the Modernization of Credit Union Law” and passed earlier this year. Assistant Commissioner Joe Rooney in charge of credit union supervision for the State of Maryland led the crafting of the MBL rule. He explained that there actually had been an earlier version of an MBL regulation on the books since 1989 that was written when the state went through an s&l crisis and many s&l’s converted to credit unions. “But no credit union took advantage of the member business lending policy,” he said. Rooney said the state’s new MBL regulation is substantially similar to NCUA’s. Among the provisions of the rule: * it allows members who borrow for construction and land development projects to have a lower equity interest in the project being financed than MBL rules require for federal credit unions: * state-chartered CUs can also make business loans to their officers as long as certain conditions are met. NCUA prohibits this for FCUs; * it prohibits CUs whose net worth is below 7% or whose CAMEL composite ratings is four or five, from making any member business loan. Rooney said each SCCU will also have to have a written MBL policy, which will be reviewed during the CU’s exam. NASCUS President Doug Duerr called the NCUA Board’s action, “a triumph for state-chartered credit unions across the country.” He said the agency’s approval “indicates yet another state has crafted a rule which simultaneously meets the needs of Maryland’s credit unions and protects the National Credit Union Share Insurance Fund from unwarranted risk.” The Division of Financial Regulation will now turn its attention to gaining the right of SCCUs to have private insurance through other insurers besides Credit Union Insurance Corp. (CUIC). The state General Assembly will take up legislation when it convenes in its next session, January-April 2002 that will set up the parameters for private insurers to be approved by the commissioner. CUIC has provided private insurance to SCCUs in Maryland since 1975. That will sunset once the state legislature passes the measure allowing for other private insurers in the state for SCCUs. – [email protected]

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.