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SALEM, Ore. – It was described as the “last step” before Oregon’s credit union rule on member business loans is finalized. Pamela Leavitt, vice president of government affairs and public relations for the Credit Union Association of Oregon, and CUAO Board member Tim Wheeler, president/CEO, WASHCO Community CU, Hillsboro, Ore. testified August 20 before the State of Oregon in support of the proposed MBL administrative rules that would remove the $100,000 cap on MBLs from the state CU statute, and give state-chartered credit unions member business lending parity with federal credit unions. The Oregon legislature passed a measure H.B. 2775 in the 2001 legislative session that updated the state’s credit union act by removing the $100,000 limit on CUs’ MBLs and set a cap matching the limitations on federal credit unions. Oregon law previously limited loans to “non-natural person” such as corporations, limited liability companies and partnerships, to $100,000. In her testimony, Leavitt noted that NCUA unanimously approved the state’s request for exemption from the agency’s member business loan rule for state-chartered CUs since NCUA determined that Oregon’s MBL rule “closely parallels the rules of six other states that have been approved by the NCUA Board.” “This decision,” said Leavitt, “allows you to move forward with the proposed Administrative Rule on MBL that we have been discussing with you since last fall. We believe the draft rule will guide state-chartered credit unions as they update their policies and procedures, and as they review their ability to provide member business loans to their members.” Among the provision’s of the proposed Administrative Rule on member business lending are: * the aggregate amount of outstanding member business loans to a member or group not exceeding 15% of the credit union’s net worth or $100,000; * the aggregate limit on the amount of a credit union’s member business loan outstanding to the lesser of 1.75 times the credit union’s net worth; or 12.25% of the credit union’s total assets. Leavitt said the implementation of the proposed MBL Administrative Rules was important because based on anecdotal evidence, an increasing number of credit unions in the state are beginning to look in to the opportunity of offering member business loans. “Member business lending is definitely a service credit unions in Oregon are interested in,” she said. -

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