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NAFCU, through a Regulatory Alert published Monday, is asking members to provide input by Aug. 11 on NCUA's proposal to eliminate the agency's member business lending waiver process and prescriptive rule requirements.

The proposal would remove the prescriptive underwriting criteria and personal guarantee requirements; the latter change would effectively eliminate the current waiver process. Instead, the proposal would allow credit unions to implement a principles-based risk management policy related to its commercial and business lending activities.

This proposal would, among other things, also remove or modify the following prescriptive limits and definitions:

• the 80 percent limit on loan-to-value ratios;
• the limit on unsecured MBLs;
• the requirement that staff have two years of direct MBL experience;
• detailed limits on construction and development loans; and
• the restrictive definition of "associated borrower";
• the 15 percent of net worth limit to one borrower (which would rise to 25 percent if the additional 10 percent is supported by readily marketable collateral).

The proposed rule would also clarify that nonmember loan participations do not count against the statutory MBL cap.

NAFCU has advocated for MBL reform and supports many aspects of the proposal, but it remains concerned about NCUA's initial estimates on how much it will spend to implement its proposed rule. The association also continues to push for a broader change in the MBL rules to that would allow an exemption from the MBL cap for more credit unions.

NCUA is taking comments on its proposal until Aug. 31.