Crawling Before Walking?

by Credit Union Watch

by Keith Leggett

In 2011, NCUA Chairman Debbie Matz stated that credit unions that wanted expanded business lending authority needed to crawl before they walk.

NCUA Chairman Matz during her testimony regarding raising the member business loan (MBL) cap before the Senate Banking Committee on June 16, 2011 stated in response to a question that the agency would put in place regulations “to ensure that … the credit unions that go above the cap do so in a moderate way, that they crawl before they walk.”

However, last year NCUA significantly expanded the number of credit unions that had an exception to the MBL cap by streamlining the process for credit unions to receive a low-income designation. The only thing a credit union needs to do is opt-in when notified by NCUA that they qualified for this designation.

One benefit associated with accepting this low-income credit union designation is that the credit union is no longer subject to the member business loan cap of 12.25 percent of assets.

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