Credit unions would have to have met at least 80 percent of its current cap for the past four consecutive quarters; be classified as “well capitalized” and remain at at least that level to continue lending; demonstrate at least five years of experience of sound underwriting and servicing of MBLs; and have the requisite policies and experience in managing business loans.
NCUA would be free to set additional limitations on growth, as well.
The bill would require the NCUA Board to issue proposed rules within six months after enactment. It also calls for two reports to Congress within three years of enactment.
Earlier this week, NAFCU wrote a letter to top Senate and House committee leaders seeking these types of changes, including the increase of the cap, a long-standing goal that would increase the amount of lending that credit unions can do.
If the legislation becomes law it could give credit unions $17 billion more to lend more in the first year, creating nearly 160,000 new jobs at no cost to taxpayers, according to the Credit Union National Association (CUNA).
CUNA also applauded at a second that would expand access to capital, a measure introduced by Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.).
“These two key pieces of legislation represent tools that will give credit unions greater options for serving their growing memberships, including small-business owners in search of credit to keep their businesses and their communities thriving," said CUNA President and CEO Bill Cheney.
The capital access bill allows well-capitalized credit unions to match a growing deposit base, derived from a growing membership, with capital from sources other than retained earnings, currently the only type of capital that counts at a credit unions.