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Regulatory Advocacy

Working Together to Reduce Regulatory Burdens
Regulation Summary
Agency National Credit Union Administration
Rule Name Proposed Member Business Lending Rule
Comment Due Date 08/31/15

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The NCUA Board approved a proposed member business loan (MBL) rule at the agency’s June open Board meeting. The proposed rule will have a 60-day comment period with comments due to NCUA by August 31, 2015.

The proposed rule would completely overhaul NCUA’s MBL regulation. Almost all requirements not in the Federal Credit Union Act would be removed. The proposal would create a category of “commercial” loans for safety and soundness purposes and utilizes the category of MBLs for compliance with the Act’s limitations on member business lending. For example, the Act does not categorize any nonmember participations as MBLs and neither does the proposed rule. However, business loan participations are considered commercial loans for the purposes of safety and soundness.

The rule would remove all of the specific requirements that currently require waivers, including the personal guarantee requirement. It would also exempt some CUs with less than $250 million in assets from the board of director and management responsibility requirements and commercial loan policy requirements. The proposal does have an 18-month implementation period.