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Feb. 25, 2013 – NCUA on Friday published supervisory guidance on the member business loan regulatory waiver process that explains, among other things, when and how credit unions can seek blanket waivers instead of having to apply for a waiver for each affected MBL.

The supervisory guidance is included as an enclosure withLetter to Credit Unions 13-CU-02. The supervisory letter to examiners:

• defines the two general types of MBL waivers – an individual loan waiver and a blanket waiver;
• establishes the specific financial attributes a credit union should exhibit along with the risk management processes a credit union needs to have to qualify for a waiver;
• streamlines the procedure for processing a waiver request for participated loans;
• addresses specific issues associated with waiver requests related to loan to value, personal guarantees and associated borrower;
• adds clarity to determining the principals and associated borrowers in an MBL relationship; and
• reinforces expectations and best practices related to business lending.

NAFCU and credit unions have been asking NCUA for some time to provide guidance on the MBL waiver process, so Friday's action is a welcome step. But the association continues to press for rule changes consistent with President Obama's 2012 executive orders, which urge removal of outdated and unnecessary regulations.

"We are continuing to advocate for removal of the personal guarantee on MBLs," said Carrie Hunt, NAFCU's general counsel and vice president of regulatory affairs. "We appreciate NCUA's issuance of added guidance but will continue to seek rule changes that eliminate unnecessary constraints on credit unions' efforts to serve members."

Read more about the guidance on the NAFCU Compliance Blog.

• NCUA Letter 13-CU-02
• Supervisory Letter 13-01; enclosure with guidance
• NAFCU Compliance Blog