Four pieces of legislation were introduced in the 113th Congress that would have helped provide relief from the credit union member business lending cap. Unfortunately, these bills did not get consideration on the floor of the House of Representatives or the Senate. NAFCU is working with the sponsors to ensure these pieces of legislation are reintroduced in the 114th Congress. NAFCU will continue to pursue passage of legislation to increase or remove the arbitrary business lending cap that currently applies to credit unions. Measures introduced in the 113th Congress include:
While recovery from the financial crisis remains fragile, credit unions have the capital to help America's small businesses thrive. However, due to the outdated member business lending cap, their ability to help stimulate the economy by providing credit to small businesses is hampered. Removing or modifying the credit union member business lending cap would help provide economic stimulus without costing the taxpayer a dime. In addition, it is worth noting that officials at the Treasury Department and the NCUA have expressed support for lifting the MBL cap. Several outside groups from all sides of the political spectrum have also endorsed the legislation including the Consumer Federation of America (CFA) and Americans for Tax Reform (ATR).
NAFCU has a strong history of supporting credit union member business lending and has testified before the Senate Banking and House Financial Services Committees on the importance of this issue. NAFCU would also support alternatives to a straight member business lending cap lift such as raising the minimum loan amount that would count against the member business lending cap.
We are committed to pursuing all legislative avenues to maximize the possibility of this issue being considered moving forward.
When Congress passed the Credit Union Membership Access Act (CUMAA) (P.L.105-219) in 1998, they put into place restrictions on the ability of credit unions to offer member business loans. Congress codified the definition of a member business loan and limited a credit union's member business lending to the lesser of either 1.75 times the net worth of a well-capitalized credit union or 12.25 percent of total assets. Also pursuant to section 203 of CUMAA, Congress mandated that the Treasury Department study the issue of credit unions and member business lending.
A January 2001 study by the Treasury Department and a 2011 study commissioned by the Small Business Administration's Office of Advocacy, both found that bank lending was largely unaffected by changes in the credit unions' business lending, and that credit unions have the ability to offset declines in bank business lending during a recession.
NAFCU has stayed at the forefront of this issue and continued to champion credit unions in major media nationwide.
NAFCU Hails Royce's New Member Business Lending Bill (March 13, 2014)
NAFCU: Outdated Artificial Member Business Lending Cap On Credit Unions Hurts Small Business (December 5, 2013)
NAFCU Hails Sen. Udall's Introduction of Small Business Lending Enhancement Act (May 16, 2013)
NAFCU Applauds Rep. Maloney's Introduction of MBL Cap Lift for Disaster Assistance (April 19, 2013)
Read recent letters from NAFCU to members of Congress on member business lending issues that affect credit unions and their members.
5-12-2014 NAFCU's Letter to the House in Support of Member Business Lending (H.R. 688)
5-12-2014 NAFCU's Letter to the Senate in Support of Member Business Lending (S. 968)
6-15-2013 NAFCU letter regarding MBL
6-6-2013 NAFCU letter to Small Business
View all NAFCU Policy Letters
March 5, 2014 - MBL amendments and improvements letter to NCUA
View all of NAFCU's Regulatory Comment Letters
Updated January 2015