Noting that credit unions often face greater business lending demand from their members in the wake of natural and other disasters, the League and CUNA have thrown their support behind new legislation that would give credit unions more flexibility in making those loans to aid in disaster recovery.
HR 1646, which was introduced by Rep. Carolyn Maloney (D-N.Y.) on Thursday afternoon, would exempt disaster loans made by credit unions from the 12.25 percent-of-assets member business lending (MBL) cap.
“Exempting these loans from the cap will open up a new source of credit for struggling small businesses and untie the hands of credit unions that want to provide that assistance. Credit unions are key members of the communities they serve and want to be there for small businesses who need assistance recovering from natural disasters. This bill will provide businesses a source of capital to help them rebuild and recover,” Rep. Maloney said in a statement.
The League sent a letter urging members of the Alabama and Florida Congressional delegations to support and cosponsor this legislation while also reminding members that a more complete way to enable credit unions to serve fully their small business members would be to permit well-capitalized credit unions with significant business lending experience operating near the member business lending cap the opportunity to apply to NCUA for permission to expand business lending up to 27.5 percent of their total assets.