WASHINGTON-With more than 4,000 people expected here this week for CUNA's Governmental Affairs Conference, the lobbying will begin once again for two long-time priorities for credit unions that have been reintroduced in the new Congress.
As expected, credit union congressional allies reintroduced bills to raise the member business loan limit and allow credit unions to raise supplementary capital, signaling a new lobbying pitch for the perennial credit unions bills.
Republican Ed Royce of California once again introduced a bill that would raise the MBL limit from the current 12.25% of assets to 27%. The bill has been introduced in the past six Congresses.
Republican Peter King of New York and Democrat Brad Sherman of California introduced a bill that would allow credit unions to raise new forms of capital. The supplementary capital bill has also been before Congress several times before.
Both pieces of legislation are supported by the credit union trade associations and, in addition to lobbying to protect the credit union tax exemption, credit union representatives hiking the Hill this week will also press once again for the member busines lending (MBL) bill, known as the Credit Union Small Business Jobs Creation Act, and the supplementary capital bill, known as the Capital Access for Small Businesses and Jobs Act.
What The Bills Propose
"Credit union membership grew by at least 2.4 million in 2012-the greatest membership growth in 15 years," said CUNA President and CEO Bill Cheney. "These two key pieces of legislation represent tools that will give credit unions greater options for serving their growing memberships-including small business owners in search of credit to keep their businesses and their communities thriving."
Royce sponsored similar legislation on MBLs in the previous Congress as H.R. 1418, which eventually drew 144 cosponsors before dying. Under the bill, to qualify for the 27.5% MBL cap a credit union would need to meet the following criteria:
* Meet at least 80% of its current cap for the past four consecutive quarters.
* Qualify as "well capitalized."
* Demonstrate at least five years of experience of sound underwriting and servicing of MBLs.
* Have the requisite policies and experience in managing MBLs.
* Satisfy other standards that the NCUA Board "determines are necessary to maintain the safety and soundness of the insured credit union."
"The time is right for this bill. It is a jobs bill, plain and simple, and will help invigorate our country's economy by spurring much needed lending to small businesses which are our nation's job creators," said NAFCU President Fred Becker.
The supplementary capital bill, which is similar to legislation that Reps. King and Sherman also introduced in the previous congress, proposes that non-share capital accounts:
* Not alter the cooperative nature of the credit union.
* Are uninsured.
* Subordinate to all other claims against the credit union, including the claims of creditors, shareholders, and the NCUSIF.
* Are available to be applied to cover operating losses of the credit union in excess of its retained earnings and, to the extent so applied, will not be replenished.
* Are subject to maturity limits as determined by a credit union's board.
* Are offered by a credit union that is determined by the board to be sufficiently capitalized and well-managed.