NCUA proposes to eliminate MBL waiver process
by: Brandy Bruyere
During its Thursday, June 18th meeting, the NCUA Board issued a proposal to amend the Member Business Loan (MBL) rule which aims to provide regulatory relief from some of the more prescriptive underwriting requirements in the rule. This marks the first time in twelve years that NCUA is considering comprehensive changes to this rule, and could have a significant impact on credit unions’ ability to make MBLs. Today I’ll just provide a high-level overview of the proposal, and NAFCU’s Regulatory Affairs team will blog on some of the finer details of this proposal in a series of blogs once the proposal is formally published in the Federal Register.
Just as a brief reminder, the MBL rule (Part 723) contains specific requirements and is not nearly as flexible as NCUA’s general lending rule (section 701.21) in terms of underwriting standards. Here are a few of the current MBL requirements:
- Collateral and security requirements including limits on the loan-to-value ratio, a general requirement that the business’ principals provide a personal guarantee, and limits on unsecured business loans
