CHARLOTTESVILLE, Va. – The announcement by NCUA that it had doubled the number of credit unions eligible for a low-income designation, which would allow, among other consequences, exceptions to the Member Business Loan cap, only affects approximately a quarter of the 1,001 CUs included under the expanded eligibility, according to a new analysis.
That analysis, by SNL Financial here, has found that of the 1,121 credit unions currently designated as low income, 27% offer member business lending, which accounts for 5.8% of all low-income credit unions’ assets. Among the 1,001 eligible institutions, 24% offer member business lending, which accounts for 2.4% of that group’s total assets, SNL reported.
While the banking industry has responded with criticism of the move, NCUA has said the expansion is not anything new and that it is merely simplifying its process for granting exemptions to the cap on business lending and had simply notified the 1,001 CUs they were eligible. NCUA also said it made the move in part to help credit unions make additional loans in drought-stricken areas.
SNL added that “in terms of direct agricultural loans, credit unions remain a modest, though increasing, source of credit. Loans secured by farmland rose to $1.15 billion in the first quarter, a 9.75% increase from a year earlier.”
SNL said the largest agricultural lender is Wabash, Ind.-based Beacon Credit Union, which has $961.4 million in assets and grew outstanding farmland-secured loan amounts to $318.0 million in the first quarter, up 11.28% from a year earlier.