Udall Revives MBL Reform; Leahy/Sanders to Support Posted by AVCU on 12:45 PM

Senator Mark Udall (D-CO) announced at this week's 2011 CUNA Governmental Affairs Conference (GAC) the release of a bi-partisan letter stating his intent to re-introduce legislation to increase credit union member business lending (MBL) authority. The letter to members of the U.S. Senate was co-signed by Senators Olympia Snowe (R-ME), and Charles Schumer (D-NY). It announces the Small Business Lending Enhancement Act, which would allow credit unions to increase small business lending to 27.5% of assets from the current limit of 12.25%.

In order for a credit union to go beyond the current 12.25% cap, it would have to hold at least 7% capital, have a history of MBL experience, be near the 12.25% cap for the prior year and receive approval by NCUA to exceed it. An approved credit union would have to halt further member business lending if its capital fell below 7%.

At the GAC and in the letter, Udall put forth that the MBL limit increase for credit unions would inject an expected $10 billion into the U.S. economy and create an estimated 100,000 jobs. "We've worked this out," he said. "It makes sense. We ought to put it into law. We came very close last year."

The Obama Administration last year said it supports increasing the credit union MBL cap. In Hill visits by Vermont GAC participants, senior aides for Vermont senators Leahy and Sanders both indicated anticipated support for the Udall effort.