WASHINGTON - NCUA Chairman Debbie Matz on Thursday backed increasing the member business lending (MBL) cap for credit unions, saying that business lending, when done properly, is an important tool for credit unions and their members.
Matz spoke during a Senate Banking Committee hearing on the state of the credit union industry. She was the sole witness during the hearing.
Responding to questions from Senator Richard Shelby (R-Ala.), Matz said that while some credit unions have had issues due to their business lending practices, the number of credit unions that have experienced these problems is small.
Legislation that would increase lift the current MBL is currently pending in Congress.
Matz said that NCUA would follow this legislation, once passed, with "rigorous regulations" to fight against any additional risks. Rather than opening the "flood gates" right away, Matz said the agency would force many credit unions to start out with low levels of loans before they are permitted to increase the size of their MBL portfolios.
CUNA continues to look for an appropriate vehicle for Senator Mark Udall's MBL bill legislation during this or the next Congress.
Udall's legislation, if approved, would lift the MBL cap to 27.5% of assets, a move that CUNA has said would inject up to $10 billion in new, non-taxpayer-backed funds into the economy, creating as many as 100,000 new jobs.
CUNA's statement to the Senate Banking Committee is available via the Governmental and Political Affairs Center page of NJCUL's Web site by clicking here.