spot_img

Credit Unions vs. Banks Again Over Member Business Lending Rules

Date:

By Roy W. Urrico

Screen-Shot-2013-07-10-at-11.42.39-AMCredit Union and bank lobbyists appear headed for a showdown . . . again. The banking industry has become gradually more determined in their attacks on credit unions, calling for a repeal of the credit union tax status, criticizing credit unions for satisfying member business lending needs in the market, and opposing regulatory alterations that would give eligible credit unions access to supplemental capital and improve the safety and soundness of the credit union system.

Credit unions have been making member-business loans (MBLs) since their inception in the early 1900s. In the first 90 years of existence, there was no business lending cap. When Congress passed the Credit Union Membership Access Act (CUMAA) (P.L.105-219) in 1998, they restricted credit unions’ ability to offer member business loans. Congress codified the member business loan definition and limited a credit union’s member business lending to the lesser of either 1.75 times the net worth of a well-capitalized credit union or 12.25 percent of total assets. Also pursuant to section 203 of CUMAA, Congress mandated that the Treasury Department study the issue of credit unions and member business lending.

This content is for CU BUSINESS eMagazine , Special Deal: 2 websites , and NEW! The Leadership Team Builder Group Subscription members only.
Log In Register

Share post:

spot_img
spot_img

Popular

More like this
Related

Credit Unions Set 2023 Testing Agenda for The Lab at Filene

  The Lab at Filene takes the next step in...

ALM First Announces New Dates & Locations for Fall M&A Master Sessions

Dallas, TX – ALM First has expanded its M&A Master...

Jack Henry Teams Up with Google Cloud to Accelerate its Multi-year Modernization Strategy

Google Cloud will power Jack Henry’s cloud-first services for...

United Federal Credit Union Names Will Schirmer Chief Human Resources Officer

JOSEPH, Mich. –United Federal Credit Union has named Will...