Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
Loans for musical instruments may qualify as MBLs NCUA
ALEXANDRIA, Va. (8/19/11)--Loans in excess of $50,000 that are used by members to purchase musical instruments may be considered member business loans (MBL), the National Credit Union Administration said in a legal opinion. Responding to a letter from Houston Musicians FCU manager Bob McGrew, NCUA Associate General Counsel Hattie Ulan said that these types of loans provide “a means for your professional musician members to purchase a musical instrument for use in their trade as paid musicians.” She added that the musical instruments that are purchased with the loan are “tool(s) of the musician’s trade” and are “acquired for use in a business capacity. “Therefore, where a loan to a member for this purpose totals $50,000 or more when aggregated with other such loans to the member, the loan is an MBL,” Ulan wrote. While McGrew noted that the U.S. Internal Revenue Service (IRS) has previously said these loans should be considered personal loans and would not consider any interest on these loans to be a business deduction for the member, Ulan said that the NCUA “(does) not consider IRS treatment of an expense to be determinative of whether a loan qualifies for MBL treatment.” Ulan also encouraged the credit union to discuss extending its aggregate MBL limit with regional credit union authorities. For the full letter, use the resource link.
Other Resources

RSS





print
News Now LiveWire
20 breakout sessions available at @CUNA's April lending school #creditunions http://t.co/eTK0fVO0RK
13 hours ago
.@CoreLogicInc: Jan. home prices jump nearly 6% annually #Market #NewsNow http://t.co/DoDtHhjvaw
14 hours ago
CU Effect: @StLouisComm collaborates to save homes with FHLB grant #NewsNow http://t.co/fxX8EhouUj
20 hours ago
#NewsNow March 31 deadline for Biz Kid$ fin. ed grant application http://t.co/5AD5ZYPLEU
21 hours ago
.@CUNA sends letters on @RepAndyBarr QM bill, @RepMickMulvaney @NCUA budget transparency bill #NewsNow http://t.co/cRAk46ALeD
22 hours ago