House Members Introduce Legislation to Lift MBL Cap During Crisis

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Read more at the Washington CU Daily

Two House members have introduced legislation that would lift the member business lending cap during the pandemic in an effort to allow credit unions to make more loans during the economic crisis.

Reps. Brad Sherman (D-Calif.) and Brian Fitzpatrick (R-Pa.) introduced legislation Monday that would lift the cap of 12.25% for up to one year after the national emergency has ended. The exemption prohibits any business loan that would undermine the safety and soundness of a credit union.

Credit union trade groups have pushed for such an exemption throughout the coronavirus crisis, while banking trade groups in the past have said the restriction should stay in place.

“In an emergency, many businesses won’t have the time to establish a relationship with a new lender,” Sherman said. “This legislation represents a tailored approach to giving credit unions the flexibility they need to assist their small businesses members struggling as a result of COVID-19.”

Fitzpatrick said the legislation “would ensure that our community credit unions have the maximum flexibility necessary to provide their small business members with the credit access, support, and hope they need to survive the pandemic.”

CUNA and NAFCU quickly endorsed the legislation.

“Thanks to Reps. Sherman and Fitzpatrick for their bipartisan introducing this to ensure that all available business credit is deployable during and after the pandemic so small businesses can get back to business and Main Street communities can recover quickly,” CUNA President/CEO Jim Nussle said.

“Credit unions have long sought to provide essential loans to small businesses – including many owned by minority populations – more so than their counterparts in the banking industry,” NAFCU President/CEO B. Dan Berger said.

Author


  • A veteran Washington reporter, David spent four years as Washington correspondent for the Credit Union Times before starting Washington Credit Union Daily. He has spent his career writing and editing for many of the capital’s leading publications, including CongressDaily, National Journal magazine and Congressional Quarterly Weekly. He was part of a team that won a 2005 National Headliner Award for a special issue of National Journal on “The State of Congress.” He holds a B.A. in political science from The George Washington University and an M.A. in journalism from Indiana University.

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