Member business lending (MBL) has been a hot topic in the financial services community this summer, particularly as the industry awaits finalization of the NCUA’s rule changes. While credit union lending to businesses has been on the rise over the last several years, both in terms of dollars and the number of credit unions that offer MBL services to their members, the proposed changes could perpetuate further growth in this area. Credit unions would have more flexibility and autonomy for these loans and businesses would have new sources to funds needed.
For now, though, there’s a relatively small number of credit unions making loans to businesses. Only 34 percent of all 6,200+ credit unions offered some form of MBL to their members as of the close of the second quarter this year, and yet those loans totaled nearly $49 billion. This data comes from Sageworks’ Bank Information.
It’s likely no surprise that larger credit unions are making the biggest impact in MBL. More than 78 percent of credit unions with more than $100 million in total assets offered MBL to their members for the same period of 2015. Those institutions carried nearly all of the MBL loans—$47 billion of the total. Melrose Credit Union, headquartered in Queens, N.Y., stands as the number one in MBL—more than doubling the second-ranked credit union for business lending. The New York City-based institution offered members nearly $1.8 billion for this period. Bethpage Federal Credit Union, another N.Y.C.-based institution, ranked second for the quarter, followed closely by Evangelical Christian Credit Union. The Brea, Calif., credit union offers membership by affiliation with Christian-centered ministries worldwide.continue reading »