Tuesday, May 12, 2020

Bills Exempt Business Loans Made During Pandemic Emergency from MBL Cap

Legislation has been introduced in the House of Representatives and the Senate that will exempt business loans made during the COVID-19 pandemic from the aggregate member business loan (MBL) cap.

Representative Brad Sherman (D - CA) introduced on May 8 legislation (HR 6789) to exempt business loans originated by insured credit unions during the COVID-19 pandemic from the aggregate member business loan (MBL) cap until one year after the end of the COVID-19 emergency declaration.

The aggregate MBL cap for credit unions is 12.25 percent of assets.

The COVID-19 emergency declaration occurred on March 13, 2020.

The bill also extends temporary provisions dealing with the Central Liquidity Facility in the CARES Act, which were scheduled to expire at the end of 2020. The CARES Act expanded access to and increased the borrowing authority for the Central Liquidity Facility.

Co-sponsors of the bill include Reps. Don Young (R-AK), Brian Fitzpatrick (R-PA), Maxine Waters (D-CA), Suzanne Bonamici (D-OR), Vicente Gonzalez (D-TX), Eleanor Holmes Norton (D-DC), Joe Neguse (D-CO), J. Luis Correa (D-CA), Alan Lowenthal (D-CA), Jeff Van Drew (R-NJ) and David Trone (D-MD).

Senator Ron Wyden (D-OR) announced his intention to introduce a companion bill that would exempt the extension of credit to aid in the recovery of the COVID-19 emergency from the definition of a member business loan and thereby the MBL cap for one year. The bill states that the extension of credit must occur before the end of the one-year period beginning on March 13, 2020.

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