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Comments on NCUA MBL Proposal Due Aug. 31
Monday, July 6, 2015 6:45 AM

Comments on the National Credit Union Administration’s member business lending (MBL) proposal are due to the agency Aug. 31, according to the proposal’s publication in the Federal Register Wednesday. NCUA believes the rule will serve to remove arbitrary MBL limits and replaces them with a principles-based regulatory approach.

The proposed rule removes or modifies a number of MBL restrictions, including the personal guarantee requirement, 80 percent limit on loan-to-value ratios; limit on unsecured MBLs; requirement that staff have two years of direct experience; detailed limits on construction and development loans; and the 15 percent of net worth limit on loans to one borrower, which will now increase to 25 percent if the additional 10 percent is supported by readily marketable collateral.

CUNA President and CEO Jim Nussle called the proposal a “step in the right direction,” but said that more can be done, and that CUNA will be seeking further regulatory relief, including legislation to lift the cap of 12.25 percent of a credit union’s assets. CUNA is also seeking comments from its member credit unions through Aug. 21.