Member Business Lending Cap
Written by Steve Van Beek
Yesterday, NAFCU sent a letter to Speaker Boehner and Minority Leader Pelosi on H.R. 1418 - urging their action to increase the member business lending cap for credit unions.  This bill, The Small Business Lending Enhancement Act of 2011, would increase the member business lending cap to 27.5% of total assets if certain conditions are met.  The legislation is H.R. 1418 in the House, and S.509 in the Senate.
Under the proposed legislation, credit unions would be eligible for the increase if they meet the following:
- Must be considered well capitalized (currently 7% net worth ratio);
- Must have at least 5 years of member business lending experience;
- Must be at or above 80% of the current 12.25% cap for at least one year prior to applying for the increase; and
- Must be able to demonstrate sound underwriting and servicing based on historical performance and strong leadership management.
Additional information on NAFCU's attempts to increase the MBL cap can be found here.
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Have a great weekend! Â