WASHINGTON – Credit unions will get to make their case next month about why they should have the cap raised on member business loans from 12.25% to 27.5%.
Rep. Shelley Moore Capito, chairman of the House Subcommittee on Financial Institutions and Consumer Credit, said Wednesday that her panel will hold a hearing “sometime in October” on the legislation as it looks at ways to jumpstart the economy and create more jobs
The West Virginia Republican made her announcement during a speech at NAFCU’s Congressional Caucus in the Mayflower Hotel, but in a subsequent interview with Credit Union Times she said she still hasn’t decided whether to support the bill, which is sponsored by Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.).
“I will listen to what everyone has to say. I want to have some questions answered, including how many credit unions are coming up against the cap,’’ Capito said.
The Senate Banking Committee held a hearing on a companion measure in June.
Under the bill, 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.
The House bill has 62 cosponsors and a companion bill by Sen. Mark Udall (D-Colo.) has 20 cosponsors.
Capito also said her panel has passed several pieces of legislation that would reduce the regulatory burden on credit unions and other financial institutions.
These measures, which include a restructuring of the Consumer Financial Protection Bureau, will “give some sanity to some of the regulations” that are out there, she said during her speech.