Tuesday, June 16, 2015

ABA, ICBA Oppose Back-Door Increase in CU Business Lending

The American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA) wrote to the House Appropriations Committee on June 11 opposing the use of the congressional spending process as a back door for a credit union-backed provision to further expand their member business lending powers.

The gambit in question would expand the exemption for business loans secured by a 1-to-4-family dwelling to include those dwellings that are not primary residences.

Currently, any business loan fully secured by a 1-to-4 family dwelling that is the primary residence of a credit union member is exempted from the member business loan cap of 12.25 percent of assets.

Credit unions claim that the proposal would merely create parity in loan classifications between credit unions and commercial banks.

However, the two bank trade groups wrote that the proposal would allow credit unions to finance rental housing businesses without counting these loans toward the 12.25 percent MBL asset cap. ABA and ICBA wrote: "Rental housing loans are business loans; their purpose is to generate income."

"Congress must not allow credit unions to further encroach into business lending, altering the fundamental character of their charter and expanding their already significant tax subsidy," ABA and ICBA said. "At a minimum, a change of this significance should not be considered without observing regular order and appropriate debate."

Read the letter.

No comments:

Post a Comment


The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.