WASHINGTON — Sens. Ron Wyden, D-Ore., Lisa Murkowski, R-Alaska, Elizabeth Warren, D-Mass., and Ed Markey, D-Mass., introduced a bill Wednesday that would allow credit unions to increase their business lending.
The legislation would exempt residential mortgage loans from counting against a credit union's member business lending cap.
The bill was immediately welcomed by credit union advocates, though it is likely to face an uphill battle in Congress, where partisan tensions and banker opposition to the measure are likely to make it controversial.
"If enacted, this measure would create added flexibility within this arbitrary cap so credit unions may better meet the capital needs of their member small businesses," said Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions.
Jim Nussle, president and CEO of the Credit Union National Association, said the bill “creates parity for certain residential loans made by both banks and credit unions.” He noted that when a bank provides a residential mortgage, it is considered a real estate loan, while a credit union loan is considered a business credit and counts against the lending cap. That cap bars credit unions from holding more than 12.25% of their assets in business loans.
The Senate bill mirrors legislation that was introduced in the House earlier this year by Rep. Ed Royce, R-Calif., Jared Huffman, D-Calif., Don Young, R-Alaska, and Peter DeFazio, D-Ore.
