In a letter to congressional leaders on April 22, 51 state bankers associations flagged “opportunistic and unnecessary” attempts by the credit union industry to seek charter enhancements — such as expansion of the member business lending cap — during the coronavirus pandemic.
The state bankers associations noted that government guaranteed loans, including SBA Paycheck Protection Program loans, are already exempt from the business lending cap, and that an expansion is unnecessary. The group added that at this time more than 99 percent of credit unions are not affected by the member business lending cap.
“We are proud of the joint work banks and credit unions have done together during this crisis, and both industries appreciate the important role we all play to keep liquidity flowing to communities,” the groups said. “However, efforts to increase credit union powers in the name of a crisis, including increases to the member business loan limit, are disappointing and distract from important policy priorities that are actually needed to support our small businesses.”
The aggregate member business loan cap for credit unions is 12.25 percent of assets. Credit unions that have a low-income designation or have had a history of making business loans or chartered for the purpose of making business loans are not subject to the cap.
Read the letter.
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