Senate Now Has Version Of Legislation To Raise MBL Cap

WASHINGTON – The push to raise the statutory limit on credit union member business lending got a boost Thursday when three U.S. Senators introduced a bill that would allow NCUA to raise a credit union’s MBL cap to 27.5% of assets, from the current limit of 12.25%, provided the CU met certain requirements.

Sens. Rand Paul, R-Ky., Jack Reed, D-R.I., and Sheldon Whitehouse, D-R.I., introduced the legislation this week. Their bill is similar to H.R. 1188, the “Credit Union Small Business Jobs Creation Act,” introduced in the House of Representatives in March by Reps. Ed Royce, R-Calif., and Greg Meeks, D-N.Y. [Link:

Both CUNA and NAFCU applauded the new Senate bill, as the two trade groups have long lobbied for relief from the MBL cap.

Jim Nussle, president and CEO of CUNA, said in a statement, “The Small Business Lending Enhancement Act of 2015 would help spur the nation’s economy by allowing small businesses greater access to credit union capital. I thank Sens. Paul, Whitehouse and Reed for their leadership and commitment to introducing legislation that will help credit unions and small businesses create new jobs across the country.”

According to estimates by CUNA economists, the bill would help create 152,200 jobs within the first year of enactment, and would generate a first-year increase in capital of $14 billion.

NAFCU Weighs In

Dan Berger, president and CEO of NAFCU, said, “Raising the arbitrary credit union member business lending cap is a win-win-win for small businesses, credit unions, and consumers. NAFCU applauds Senators Paul and Whitehouse for their bipartisan leadership in introducing this important legislation that would unleash additional capital and create jobs without burdening American taxpayers.”

To qualify for an increased MBL cap, the bill requires the CU to meet the following standards:

• the institution has met at least 80% of its current cap for the past four consecutive quarters;
• is classified as “well capitalized”;
• can demonstrate at least five years of experience of sound underwriting and servicing of MBLs;
• has the requisite policies and experience in managing MBLs;
• has satisfied other standards which the NCUA Board “determines are necessary to maintain the safety and soundness of the insured credit union.”

Thursday’s bill is similar to S. 968, the “Small Business Lending Enhancement Act of 2013,” a bipartisan measure introduced last Congress by Sen. Mark Udall, D-Colo., and co-sponsored by Sens. Paul and Whitehouse.