Removing Barriers Blog

NCUA Holds Monthly Meeting
Posted June 18,2015 by CUNA Advocacy

The National Credit Union Administration Board (NCUA) held its June open board meeting today.  There were six items on the agenda including a proposed member business loan (MBL) rule.  

The proposed MBL rule would modernize business lending by removing prescriptive and arbitrary limit and credit unions freedom and flexibility to determine their best approach to business lending.

Among the restrictions removed or modified by the proposed rule are:

  • The requirement for a personal guarantee;
  • The 80% limit on loan-to-value ratios;
  • The limit on unsecured MBLs;
  • The requirement that staff have two years of direct experience;
  • Detailed limits on construction and development loans;
  • The restrictive definition of “associated borrower;” and
  • The 15% of net worth limit on loans to one borrower, which will now increase to 25% if the additional 10% is supported by readily marketable collateral.

The rule would also clarifies that non-member loan participation will not count against the statutory member business lending cap. Comments on the proposed rule, available here, must be received within 60 days of publication in the Federal Register.

The agency also approved:  

A recommendation to extend the current interest-rate ceiling on most federal credit union loans through March 10, 2017 to help federal credit unions remain competitive;

A notice under the Economic Growth and Regulatory Paperwork Reduction Act of 1996—part of the agency’s ongoing regulatory review process—to identify rules for possible modification, simplification or repeal covering corporate credit unions; directors, officers and employees; and money laundering;

A final policy statement creating a Minority Depository Institution Preservation Program to support minority credit unions; and

A final interagency rule amending regulations on loans in areas with special flood hazards.