ABA today voiced its opposition to a bill, introduced yesterday by Sens. Rand Paul (R-Ky.), Sheldon Whitehouse (D-R.I.) and Jack Reed (D-R.I.) that would raise the member business-lending cap for certain credit unions from 12.25 percent to 27.5 percent of total assets. The legislation would raise the cap for well-capitalized credit unions that have a history of member business lending, have operated near the current cap for at least one year and have received approval from the National Credit Union Administration.
“Given NCUA’s and credit unions’ lack of expertise in business lending, it remains unclear whether this highly controversial bill is necessary or wise,” said ABA EVP James Ballentine. “ABA will continue to fight all efforts to change or circumvent the member business lending cap.”
The bill is a companion to H.R. 1188, which was introduced in the House in March. ABA, the state bankers associations and bankers have successfully opposed similar legislation in previous Congresses, and ABA helped generate a record 3,000 comment letters, nearly all in opposition, to an attempt by the NCUA to circumvent the existing statutory cap. ABA will continue to resist efforts to expand the ability of tax-exempt credit unions to exceed their mission by reaching business markets already well-served by taxpaying community banks.