Member Business Loans (Texas SCUs)
Friday, June 22, 2018 8:40 AM

NCUA recently approved a change to its member business lending regulation that removes the member’s occupancy requirement for loans secured by liens on 1-to-4-family dwellings. This change, however, does not apply to Texas-chartered credit unions since Texas-chartered credit unions are currently exempted from compliance with Part 723 of NCUA Rules and Regulations and are required to comply with the provisions of 7 TEX. ADMIN. CODE Section 91.709 (Member Business and Commercial Loans). Existing Rule 91.709 requires a 1- to 4-family dwelling to be the primary residence of a member in order to be excluded from the definition of a member business loan. As a result, loans secured by a non-owner occupied 1- to 4-family dwellings are still considered to be member business loans and they will continue to count towards the aggregate member business lending cap imposed on each Texas-chartered credit union.

At its next meeting, the Texas Credit Union Commission is tentatively scheduled to consider potential amendments to its member business lending rule to conform the rule with changes incorporated into the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, which was recently signed into law by President Trump. These potential amendments remove the member’s occupancy requirement for loans secured by 1- to 4- family dwellings and ultimately, if approved, would provide Texas-chartered credit unions parity with the changes to the federal regulation.

Source: Texas Credit Union Department