FCUs Get Relief On Biz Loans
Federal credit unions involved in the Small Business Administrations (SBA) 7a lending program are being granted relief to comply with the SBA's rules, and not conflicting regulations issued by NCUA. The agency has issued an opinion letter that seeks to clear up for credit unions which rules they should follow. "There were several provisions that didn't dovetail with NCUA's regulations," noted CUNA's Mary Dunn. Among those: SBA permits a maximum loan term of 25 years, versus 12 under NCUA regs, and credit unions can now pass along a charge from the SBA without violating NCUA regs banning prepayment fees. "This is very, very important to credit unions, as loans with the SBA guarantee don't count toward the 12% (business lending) cap," noted Dunn.