Newsroom
Thaler: MBL relief will allow CUs to help more small biz
NAFCU Vice President of Legislative Affairs Brad Thaler wrote to members of a House Small Business subcommittee ahead of its hearing today on how to kick start entrepreneurship and Main Street economic recovery to reiterate the association’s call for relief for credit unions from the arbitrary member business lending (MBL) cap.
The hearing is scheduled to begin at 1 p.m. Eastern; a livestream of the hearing is available online.
In the letter sent Wednesday, Thaler noted credit unions' participation in the Small Business Administration’s (SBA) paycheck protection program (PPP), which has “helped countless main street small businesses survive the lockdowns required by the current pandemic.”
Thaler urged the committee to consider several changes to the Federal Credit Union (FCU) Act as they begin to examine the long-term recovery of small businesses that will allow credit unions to continue to provide much-needed access to capital to their members.
Specifically, Thaler noted the arbitrary restrictions contributing to the MBL cap under the FCU Act and reiterated the association’s call for relief from the MBL cap amid the coronavirus pandemic.
“As the country faces recovery from the impact of COVID-19 on the economy, many credit unions have the ability to go beyond SBA programs to help small businesses create jobs and stimulate the economy,” wrote Thaler. “However, due to the outdated and arbitrary MBL cap, that ability is hampered. Providing relief from the cap would help provide economic stimulus and create jobs without using taxpayer funds.”
Thaler went on to voice the association’s support for H.R. 6789, the Access to Credit for Small Businesses Impacted by the COVID-19 Crisis Act of 2020, introduced by Rep. Brad Sherman, D-Calif., which includes a provision that allows for temporary relief from the MBL cap for loans to help small businesses recover from the crisis. Similar legislation was introduced in the Senate by Sen. Ron Wyden, D-Ore.
Both bills would allow credit unions with CAMEL rating of 1 or 2 to exempt from their MBL cap loans made within the year from when the national emergency that was declared on March 13, 2020, expires to small businesses to aid in their recovery of the coronavirus pandemic. In addition, both bills would also extend changes to the NCUA's Central Liquidity Facility (CLF) made by the CARES Act through 2021.
NAFCU will monitor the hearing today and will continue fighting for relief for the credit union industry as the nation recovers from the coronavirus pandemic and beyond.