EAST HARTFORD, Conn. American Eagle FCU, the state’s second biggest credit union, said it is now longer offering member business loans because of inaction by Congress in increasing the MBL limit.
The $1.4 billion credit union said it decided at the end of last year to wind down its business lending division because it didn't want to risk investing millions of dollars ramping it up only to eventually hit the lending cap that would limit its scalability, even though the credit union is only at 2.4% of assets for its MBLs, less than half the 12.25% cap.
The move comes as credit unions continue their decade-long effort to increase the MBL cap to as much as 27% of assets, an effort that has run into a stone wall because of opposition from the powerful banking lobby.
American Eagle said without a guarantee that it will be able to significantly ramp up the business to bring it to the next level and gain proper scale, it didn't want to risk the capital.
