Rep. Carolyn Maloney (D-N.Y.) introduced legislation last week that would exempt credit unions from the member business lending asset cap after a natural disaster occurs in their area.
The bill would exempt member business loans from the statutory 12.25 percent of assets cap for up to five years after the declaration of a natural disaster.
“Federal disaster assistance that flows after each declaration of a disaster is essential but not sufficient to get a region back on its feet,” Maloney said. “I’ve heard from many small businesses about their struggle to recover from Sandy. Exempting these loans will open up a new source of credit for struggling small businesses and untie the hands of credit unions that want to provide that assistance. Credit unions are key members of the communities they serve and want to be there for small businesses who need assistance recovering from natural disasters. This bill will provide businesses a source of capital to help them rebuild and recover.”
Brad Thaler, the vice president of legislative affairs at the National Association of Federal Credit Unions, said the “common-sense initiative” would allow credit unions to better serve their communities in times of adversity.
“Lifting the member business lending cap is a key tenet of NAFCU’s comprehensive five-point plan for regulatory relief,” Thaler said. “We look forward to working to help this legislation become a reality.”
A bill to increase the MBL cap was introduced in the House earlier this year, though a companion bill has not yet been introduced since the same measure died in the Senate last year without a vote.