NCUA finalizes changes to member business lending rule

The National Credit Union Administration board this week unanimously approved a change to the regulator’s member business lending rule, removing occupancy requirements and easing the burden for CUs approaching the MBL cap.

The revised rule eliminates occupancy requirements for members on loans secured by liens on 1-to-4-unit family dwellings, and those loans will no longer count toward the MBL cap. The member business lending rule previously required those dwellings to be a member’s primary residence in order to be excluded from the cap.

NCUA approved the change by a May 30 notation vote in order to make the MBL rule conform with changes to the Federal Credit Union Act incorporated into the reg relief bill signed by President Trump last month.

The final rule, available online here, will become effective upon publication in the Federal Register.

Along with revisions to the MBL rule, NCUA last month also announced proposed changes to its payday alternative loan rule and the possibility of creating additional PAL products for credit unions. Those changes come amid a push by the regulator to increase technology options in a way that can help small credit unions and modernize the call report process.