Bankers Oppose Bill to Increase Credit Union Business Lending

Proposed legislation would raise credit union member business lending cap from $50,000 to $100,000.

David Baumann


Sep 14



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David Baumann

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David Baumann

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The American Bankers Association (ABA) is asking the sponsors of House legislation to increase the credit union member business lending (MBL) cap to reconsider their support of the measure.

Reps. Brian Fitzpatrick, R-Pa., and Vincente Gonzalez, D-Texas, introduced H.R. 4868 in July. It was referred to the House Financial Services Committee, which has not yet acted on the bill.

H.R. 4868 would increase the current $50,000 cap on credit union business loans to members to $100,000. It also would allow federal credit unions to expand loan maturities past the current 15 years.

Bankers’ Letter

In a letter to the lawmakers this week, Kirsten Sutton, the ABA’s vice president of congressional relations and legislative affairs, said the MBL cap was intended to ensure that credit unions prioritized their congressionally mandated mission of providing financial services to people of modest means in underserved areas.

“Unfortunately, the [legislation] would undermine credit unions’ congressionally mandated mission in that regard,” she wrote.

Sutton added further that by enabling longer repayment periods, credit unions could more easily underwrite large-scale commercial real estate loans.

“The limitations on credit union business lending set forth in the [law] were intended to prevent the credit union tax subsidy from being used to support commercial rather than consumer lending,” the letter states.

Where Credit Unions Stand

When the legislation was introduced in July, credit union trade groups expressed their support.

CUNA President/CEO Jim Nussle said that the current limit keeps additional affordable credit union loans from the market.

NAFCU President/CEO Dan Berger likewise backed the measure.

“Main Street small businesses rely on their local credit unions for safe, secure, and reliable loans and this bill will help communities flourish,” he said.

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