NCUA Proposes to ‘Modernize’ Biz Lending Rule

The National Credit Union Administration Thursday proposed substantial changes to its member business lending regulations. Among other things, NCUA proposed to exempt participations in loans to non-members from the MBL cap. It also proposed to eliminate explicit loan-to-value requirements, aggregate limits on construction and development loans, as well as the requirement of a personal guarantee.

“Now is an appropriate time to transition away from prescriptive regulatory limits toward general principles that will provide credit unions greater flexibility to serve business owners,” NCUA Chair Debbie Matz said in announcing the proposal.

ABA has aggressively fought any proposal that allows credit unions to veer further from their mission by expanding business lending, and believes NCUA should not take it upon itself to promote industry expansion in this area. The association will analyze this proposal closely and file detailed comments to ensure NCUA is not evading statutory limits and usurping congressional authority.

For more information, contact ABA’s Brittany Dengler.