Senate Banking Committee Holding Hearing on Credit Union Member Business Lending

June 10, 2011 - The Senate Banking, Housing and Urban Affairs Committee announced that it will hold a hearing to discuss credit union member business lending (MBL) on June 16 at 10 a.m.

National Credit Union Administration (NCUA) Chairman Debbie Matz will testify in the first panel as the sole witness, followed by a second panel of industry representatives. Credit Union National Association (CUNA) President Bill Cheney is scheduled to testify, along with Michael Lussier, chairman of the National Association of Federal Credit Unions and president and CEO of Webster First Federal Credit Union. Representatives from the American Bankers Association and the Independent Community Bankers of America will also testify.

The hearing scope is expected to include discussion of S. 509, introduced by Sen. Mark Udall (D-CO), a bill to enhance MBL for qualified credit unions. The bill would increase the MBL cap for credit unions to 27.50 from 12.25 percent of assets, if the credit union meets a number of requirements. Credit unions have to be well capitalized and meet the following other requirements:

1) Have member business loans outstanding at the end of each of the four consecutive quarters in a total amount of not less than 80 percent of the current 12.25% cap;

2) Can demonstrate at least five years of experience of sound underwriting and servicing of member business loans;

3) Has the requisite policies and experience in managing member business loans; and

4) Satisfy other standards that the National Credit Union Administration (NCUA) Board determines are necessary to maintain the safety and soundness of the insured credit union.

Rep. Ed Royce (R-CA) has introduced H.R 1418, the Small Business Lending Enhancement Act of 2011, a companion House bill to S. 509.  NASCUS will provide an update following the June 16 hearing.