ALEXANDRIA, Va. – NCUA said loans made under the U.S. Small Business Administration’s 504 program are exempt from the collateral and security requirements in NCUA’s member business loans rule.
In a new legal opinion issued to the SBA, NCUA said sections of its MBL rule specifically exempt certain loans from collateral and security requirements if the loan is guaranteed by the SBA.
In addition, "If a federal credit union makes a member business loan as part of a Small Business Administration guaranteed loan program with loan requirements that are less restrictive than those required by NCUA, then the federal credit union may follow the loan requirements of the relevant Small Business Administration guaranteed loan program to the extent they are consistent with this part. "
Also, "A federally insured State-chartered credit union that is subject to this part and makes a member business loan as part of a Small Business Administration guaranteed loan program with loan requirements that are less restrictive than those required by NCUA may follow the loan requirements of the relevant Small Business Administration guaranteed loan program to the extent they are consistent with this part if its state supervisory authority has determined that the credit union has authority to do so under State law."
