WASHINGTON (UPDATE 6/16/11, 10:20 a.m. (ET)--National Credit Union Administration (NCUA) Chairman Debbie Matz, testifying now in front of the Senate Banking Committee on credit union member business lending, says her agency will soon issue a draft rule for comment on changes to its MBL regulations. The proposal will, she said, “clarify and revise a number of current provisions.” However, she urged the banking panel to increase the MBL cap for credit unions to allow small businesses to obtain “reasonably priced loans.” In her written testimony, Matz noted:
* Today, credit unions have more than 167,000 outstanding loans to businesses, and statistics suggest that credit unions serve a small but important segment of the marketplace; * Approximately 2200 credit unions hold member business loans, up 10 percent since 2006; * Eighty-three percent of MBLs are secured by real estate; * The average size of an MBL is $223,000; and * While nearly 30% of credit unions underwrite business loans, these loans comprise just 1% percent of all commercial lending.
MBL averages range from $17,000 for unsecured lines of credit, to $680,000 for construction and development loans. Matz noted. In 2010, credit unions granted or purchased $12.1 billion in MBLs, and another $3.1 billion were added in the first quarter of 2011. If legislative changes increase the current cap on member business lending, Matz indicated that NCUA would move swiftly to amend its rules and vigorously supervise the law’s implementation. Answering lawmakers' questions now, Matz underscores credit unions' favorable delinquency rates and the positive safety and soundness record associated with such credit union loans.