110th CONGRESS, LEGISLATIVE ISSUES A - Z

Credit unions remain the most highly regulated and restricted of all insured financial institutions, particularly after the passage of the Credit Union Membership Access Act in 1998. Severe restrictions have been unintentionally imposed on credit unions in several areas. It is time to enact common sense improvements and eliminate unnecessary and outdated provisions. CURIA will benefit consumers, small businesses and credit unions by doing the following:

Consumers

• Allows credit unions to provide greater services to their members at a lower cost.

• Allows NCUA to permit credit unions to increase the 12-year loan maturity limit to 15 or more years, making it easier for consumers to comparison shop for the best loan.

• Enhances the ability of credit unions to participate in the revitalization of distressed communities by acquiring, building or refurbishing a building in an underserved community, and leasing out excess space in the building.

• Facilitate expansion of credit union services to areas of high unemployment and low median incomes that tend to be underserved by other financial institutions.

• Risk-based prompt corrective action requirements permit credit unions to provide more of the loan and savings services that benefit members

Small Businesses

• Raises the limit on credit union member business loans (MBLs) to 20%.

• Permits the National Credit Union Administration (NCUA) to change the definition of a MBL up to $100,000, rather than the current limit of $50,000, to be excluded from the 20% MBL cap.

• Congress needs to create an even greater number of available sources of credit to small businesses, which are the backbone of our economy. Helping credit unions to make these loans means that it is more likely that small businesses will be able to secure credit and that they will sustain job creation.

Credit Unions

• Prompt Corrective Action (PCA) rules induce credit unions to maintain capital levels higher than those necessary to protect the share insurance fund. Credit union response to these pressures is to limit growth, which requires limiting service to members. This reduces the amount of funds that credit unions can devote to member loans that support the economy.

• Reforming PCA through a risk-based asset approach not only will preserve the requirement that regulators must take prompt and forceful supervisory actions whenever a credit union becomes seriously undercapitalized, but also will permit credit unions to provide more of the loan and savings services that benefit members without weakening safety and soundness or protection of the share insurance fund.

• Reduces or removes several outdated or unnecessary regulatory burdens, providing credit unions with greater flexibility and ability to serve their members.

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