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CUNA Fights Banks on Residential Loan Parity Bill
Tuesday, July 28, 2015 6:45 AM

Responding to falsehoods from the banking industry, Credit Union National Association President and CEO Jim Nussle told members of the U.S. House Appropriations Committee in a letter last week that credit union loans on one- to four-unit, non-owner occupied residential dwellings are not commercial loans.

Classifying such loans as consumer loans—as they are with banks—rather than business loans would help credit unions increase their lending despite the arbitrary 12.25 percent cap on member business lending. The letter went on to say how such loans should be exempt from the statutory cap on member business lending in order to better serve members.

Nussle wrote the letter in support of the Credit Union Residential Loan Parity Act (S. 1440), which was introduced in May by Sen. Ron Wyden (D-OR). Nussle urged the legislators to closely consider what the committee may be able to do to advance the bill through the appropriations process.

“The unfortunate fact is that Congress imposed this cap because in 1998 the bankers successfully took advantage of a legislative situation in which the credit union system needed to have a new law enacted,” Nussle said. “The cap is arbitrary; it has a deleterious effect on small business lending; and it is wholly inconsistent with the credit union mission to create sources of credit for provident and productive purposes.”

In letter, Nussle also tackled bank attacks on proposals that would ensure small businesses have access to credit from credit unions, calling those attacks “willful ignorance of the credit union mission and history” as well as the purpose of credit unions’ tax status.