NCUA Chairman Debbie Matz is the lead witness in Thursday’s Senate Banking Committee hearing on legislation to raise the cap on member business loans for credit unions.
CUNA President Bill Cheney and NAFCU Chairman Michael Lussier will also testify on behalf of the legislation. Independent Community Bankers of America Executive Committee Member Noah Wilcox and ABA Chairman Stephen Wilsonare slated to testify against the measure.
Matz has supported raising the hike but has promised to step up the agency’s oversight of such lending.
Under the bill by Sen. Mark Udall (D-Colo.), eligible credit unions will be able to increase their small business lending to 27.5% of total assets, at a rate of growth not to exceed 30% a year.
Credit unions must be well-capitalized, be at or above 80% of the current cap, have five or more years of member business lending experience and be able to demonstrate sound underwriting and servicing.
If a credit union’s net worth ratio falls below the well-capitalized requirement (currently 7%), it would have to stop making new business loans.
Currently, business loans of $50,000 or more count toward the cap. CUNA and NAFCU have tried to raise that to $250,000 but that is not part of Udall’s bill or a companion bill that has been introduced in the House.
The House bill is sponsored by Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.).
The hearing is scheduled to take place at 10:00 a.m.
Continue Reading for Free
Register and gain access to:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
