Removing Barriers Blog

CUNA Writes to the NCUA on their Proposal on Loans and Lines of Credit to Members
Posted October 09, 2018 by CUNA Advocacy

On October 9th, CUNA filed a letter with the NCUA regarding its proposed amendments to Part 701, Loans to Members and Lines of Credit to Members. The letter supports proposed changes to improve clarity and make compliance easier by reorganizing a few provisions within the regulation. NCUA did not propose, but did seek comment on whether to provide longer maturity limits for certain loans, including 1–4 family real estate loans. The letter states several reasons why the Board should increase the maturity limit for these loans.

"Because credit unions are uniquely subject to both lending and maturity limit caps (whereas banks are not), we support and propose an extension of the maturity limit available for such loans, as this change is necessary and good public policy.... Further, the 15-year maturity limit restricts how credit unions can best serve their members relative to FNMA and FHLMC investor requirements, forcing credit unions to send members to a mortgage broker or bank, which can offer a term beyond 15 years, and requiring members to pay higher fees and rates or could cost the credit union a member relationship."