WASHINGTON – Four House lawmakers introduced a bipartisan bill Tuesday that would ease the calculation of the member business lending cap for credit unions so that it excludes loans to purchase small apartment buildings.
As part of the 1998 Credit Union Membership Access Act, Congress limited the size of credit unions' member business lending portfolios to about 12.25% of total assets.
But the bill would remove loans made for the purchase of non-owner occupied, 1-4 unit dwellings from the calculation of the cap. The co-authors of the bill – Reps. Ed Royce, R-Calif., Jared Huffman, D-Calif., Don Young, R-Ala., and Peter DeFazio, D-Ore. – said the legislation would allow credit unions to lend an additional $11 billion to small businesses.
"The Credit Union Residential Loan Parity Act unleashes billions of dollars of capital for small businesses at no cost to taxpayers and drives local economic investment," said Royce in a press release.
Royce pledged to work with House Financial Services Committee Chairman Jeb Hensarling to move on the bill soon. The Texas Republican is nearing the release of a second version of his regulatory relief package.
Both national CU trade associations praised the bill, with Dan Berger, CEO of the National Association of Federally-Insured Credit Unions, urging other members of Congress to sign on and co-sponsor the legislation, which he said "would provide credit unions with more flexibility within their lending cap and help them better serve small business owners' critical capital needs."
Similarly, Jim Nussle, CEO of the Credit Union National Association, thanked legislators for introducing policies that could help "to bring parity to credit unions."
"This CUNA-backed bipartisan legislation would enable credit unions to better serve their members who purchase rental properties and will benefit consumers by increasing the availability of affordable rental housing," said Nussle.
The credit union bill's chances are in doubt, however, given almost certain banker opposition to it. The banking industry is currently fighting a legal battle with the National Credit Union Administration over a regulatory rule that would exclude certain loan participations from the calculation of the member business lending cap.
