Letter to Congressman Ed Royce Regarding Member Business Lending
February 4, 2003
The Honorable Edward Royce
2202 Rayburn House Office Building
Washington, DC 20515
Dear Representative Royce:
On behalf of the Credit Union National Association (CUNA) and the 83 million credit union members nationwide, I would like to thank you for your reintroduction of the Faith-Based Lending Protection Act, H.R. 383.
CUNA and its member credit unions believe improving the access to credit by religious nonprofit organizations is key to serving their communities. Credit unions have a long history of making loans to nonprofit religious organizations, many of which are in underserved areas. These organizations make loans to churches, private faith- based schools and mission agencies, as well as homeless shelters, drug rehabilitation centers and shelters for abused women.
The Credit Union Membership Access Act of 1998 arbitrarily limited a federally insured credit union's loans to members for business purposes at 12.25 percent of total assets. The legislation exempted many faith-based credit unions from the 12.25 percent cap, but many of the member business loans they make are possible because other credit unions invest in the loans through participation agreements. When other credit unions participate in these loans, they are brought closer to their own 12.25 percent cap.
CUNA greatly appreciates your efforts to exclude loans made to non-profit religious organizations from MBL caps. Excluding MBLs made to religious nonprofit organizations from the current 12.25 percent cap will ensure these organizations can continue meeting the needs of their members and the greater community at large.
Thank you for your continued support.
Daniel A. Mica
President & CEO
Credit Union National Association