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Introduction of Royce MBL-related bill expected today
WASHINGTON (3/13/14)--As he pledged to 4,400 credit union advocates at the Credit Union National Association's 2014 Governmental Affairs Conference less than two weeks ago, Rep. Ed Royce (R-Calif.) is ready to introduce a bill to exempt loans for one- to four-unit non-occupied dwellings from the credit union member business lending cap.
CUNA expects the bill to be introduced today. Its primary co-sponsor is Rep. Jared Huffman (D-Calif.).
In a letter to his House colleagues Wednesday describing the bill and seeking support, Royce wrote: "When a bank makes a loan to finance the purchase of a small apartment building it is called a residential real estate loan.  When a credit union makes the same loan it is call a business loan" and thereby falls under the low 12.25%-of-assets MBL cap.
Royce told House lawmakers that his common-sense credit union reform bill, called the "Credit Union Residential Loan Parity Act," would fix that disparity.
He added that, if enacted, the bill would allow credit unions to lend an estimated additional $11 billion to small businesses, freeing up "much needed private sector financing for commercial businesses and rental housing without costing taxpayers a dime."
The bill also authorizes the National Credit Union Administration to apply strict underwriting and servicing requirements for the loans.
Welcoming Royce's bill, CUNA Executive Vice President of Government Affairs John Magill said, "Credit unions can do so much more to help small business grow and add jobs to the economy--and this bill will go a long way toward doing that, by making available an additional $11 billion while maintaining stringent underwriting and serving requirements.
"Credit unions are grateful for the efforts of Reps. Royce and Huffman to move forward on this bill, which makes sense for small business and the credit union members who own them."
CUNA and the state credit union leagues also support legislation to increase the MBL limit to 27.5% of assets. CUNA estimates that credit unions could lend an additional $13 billion to small businesses and help them create over 146,000 new jobs in the first year after enactment of the increase, again at no cost to taxpayers.

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