WASHINGTON — Sen. Rand Paul (R-Ky.) said Monday he wouldcosponsor legislation that would raise the cap on member businessloans.

He didn't mention the issue in his speech during NAFCU'sCongressional Caucus at the Mayflower Hotel, instead of focusing onbroader budget and spending issues, but announced his support forthe measure in response to a question from the audience.

Paul said he had always supported raising the cap and checkedwith his staff and that had been an oversight that he hadn't signedon to the measure yet.

Legislation is pending in both the House and Senate that thatwould increase the cap on member business loans from 12.25% to27.5% of assets.

In the House, a bill by Reps. Ed Royce (R-Ca.) and CarolynMcCarthy (D-N.Y.) has 62 cosponsors in the 435-member chamber. Inthe 100-member Senate, a companion bill by Sen. Mark Udall(D-Colo.) has 21 cosponsors following Paul's announcement.

Both bills require that credit unions must be well-capitalized,be at or above 80% of the current cap, have five or more years ofmember business lending experience and be able to demonstrate soundunderwriting and servicing.

If a credit union's net worth ratio falls below thewell-capitalized requirement (currently 7%), it would have to stopmaking new business loans.

During his speech, Rand said Congress has to make seriousprogress towards tackling entitlements if the country is going tosolve its long-term debt problem.

Paul, who was elected to the Senate last year, wassupported by several credit union organizations during hiscampaign.