Rule Changes To Credit Union Business Lending Would Help Maine's Small Businesses
July 17, 2015
"Economic analysis of the National Credit Union Administration's (NCUA) proposed rule change to make it easier for credit unions to provide loans to member businesses shows that it would boost small business lending in Maine by at least $65 million and create 700 new jobs in the first year alone," the Maine Credit Union League's President John Murphy told the Portland Press Herald in an interview for an article that appeared in Maine's largest daily newspaper recently.
In June, NCUA released its proposal that would remove hard-and-fast requirements and restrictions for member business lending in favor of more general principles and guidelines. NCUA has said that loosening commercial lending rules would give credit unions more flexibility and greater autonomy, and replace existing requirements for collateral, security, equity and loan limits with a broad principles-based approach. Murphy agreed, adding, "Credit unions have been pushing for years to loosen tight restrictions on the amount of money they can lend to businesses. The proposed rule change is consistent with our mission of regulatory modernization, including modifying, streamlining, refining or repealing outdated regulations."
While bills to raise the cap on member business lending from its current 12.5% to 27.5% have been introduced in Congress for the past six or seven years, and had strong sponsorship support from Maine's Congressional Delegation, the banking industry continues to oppose any changes to allow credit unions to help small businesses with liquidity. "While banks have made it far more difficult, if not impossible, for many of Maine's small businesses to have access to credit, Maine's credit unions have money to lend and are ready and willing to do so," noted Murphy.
The proposal is subject to a 60-day public comment period, which opened on July 1st, and ends August 31st.