Saying that "lending limits should be regulatory, not statutory," NCUA Chairman Debbie Matz wrote a senior Treasury Department official to raise or eliminate the statutory limit on member business loans.

She wrote Gene Sperling, counselor to Treasury Secretary Timothy Geithner that that such a move would expand access to credit for small businesses and the NCUA is capable of monitoring credit unions' MBL activity. She noted in her letter, which she sent yesterday, that the NCUA has "reasonable regulatory standards" including a loan-to-value limit of 75% or 80% and a loan-to-one borrower limit of 15% of a credit union's assets of $100,000, whichever is higher, and a two-year direct-lending experience requirement for the credit union's business lending officer.

In 1998, Congress set a business lending limit of 12.25% of a credit union's assets in most cases. Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) have introduced legislation allowing credit unions to make business loans totaling up to 25% of their assets. It would also raise the minimum dollar amount for counting a loan toward the MBL ceiling from the current $50,000 to $250,000 and exempt from the ceiling member business loans made to qualifying underserved areas and to nonprofit religious organizations. It has 34 cosponsors.