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Sens. Rand Paul, R-Ky., and Sheldon Whitehouse, D-R.I., today introduced legislation that would raise the credit union member business lending cap – a fix long advocated by NAFCU.

The text of the bill is identical to S. 968, the "Small Business Lending Enhancement Act of 2013," a bipartisan measure from the previous congress introduced by Sen. Mark Udall, D-Colo., and cosponsored by Sens. Paul and Whitehouse.

NAFCU President and CEO Dan Berger welcomed the bill's introduction. "Raising the arbitrary credit union member business lending cap is a win-win-win for small businesses, credit unions, and consumers," Berger said. "NAFCU applauds Senators Paul and Whitehouse for their bipartisan leadership in introducing this important legislation that would unleash additional capital and create jobs without burdening American taxpayers."

The bill would allow NCUA to raise a credit union's MBL cap from the current limit of 12.25 percent of assets to 27.5 percent, provided the institution:

• has met at least 80 percent of its current cap for the past four consecutive quarters;
• is classified as "well capitalized";
• can demonstrate at least five years of experience of sound underwriting and servicing of MBLs;
• has the requisite policies and experience in managing MBLs;
• has satisfied other standards which the NCUA Board "determines are necessary to maintain the safety and soundness of the insured credit union."

The cap lift and criteria are the same as those found in H.R. 1188, the "Credit Union Small Business Jobs Creation Act," offered earlier this year by Reps. Ed Royce, R-Calif., and Greg Meeks, D-N.Y.

Raising the MBL cap is a key component of NAFCU's five-point plan for regulatory relief. In related news, NAFCU has commended the NCUA for its proposed rule to eliminate the MBL waiver process and allow credit unions to decide for themselves if a borrower should be exempt from a personal guarantee.