Business Loan AmendmentsProposed

March 28, 2003, 1:00 a.m. EST 1 Min Read

ALEXANDRIA, Va. - (03/28/03) -- The NCUA Board issued severalproposed reforms to its member business loan (MBL) rules aimed atexpanding business lending among credit unions. The proposals,issued for a 60-day comment period, include several measures toease the congressionally mandated 12.25% (of assets) cap on MBLs,including exempting acquired loan participation interests from thecap, excluding MBLs to CUSOs from the cap, and the application ofoutstanding balances, as opposed to original loan amounts, to thecap. The proposals would also allow CUSOs to originate MBLs for thefirst time. The measure would also lower the requirement thatborrowers for construction and development loans hod a 35% equitystake in the project, to a 25% stake. The proposals would alsoallow credit unions to make 100% loan-to-value vehicle loans forMBLs.

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