WASHINGTON — U.S. Rep. Ed Royce (R-CA) said he will drop a bill called the "Credit Union Residential Lending Parity Act" in Congress this week that would offer some relief to credit unions pushing up against the member business loan cap.
Current law exempts home loans for one- to four-family residences from falling under the MBL definition only if the residence is the borrower's primary residence. Royce's bill would expand that exemption to cover all such loans regardless of the borrower's residency.
In remarks to CUNA's GAC Tuesday Royce, a long-time strong supporter of credit unions, said the legislation "is not a panacea, but we estimate that it will provide meaningful relief for credit unions."
Royce pointed to industry analysis indicating that approximately 20% of current outstanding MBLs are actually loans on one- to four-family residences, and that a redefinition would help credit unions that are up against the MBL cap.
The congressman urged credit union reps to urge legislators they are meeting with this week to sign on as co-sponsors.
