MBL Bill Introduced in House, Supplemental Capital Bill Expected Today

A new bill to raise the credit union member business lending (MBL) cap was introduced in the U.S. House of Representatives this morning, and the introduction of a separate House bill to grant credit unions access to supplemental capital is expected today as well.

Rep. Ed Royce (R-Calif.) introduced legislation that would increase credit unions’ business lending capacity. Credit unions are currently restricted by a cap that limits their MBL activity to no more than 12.25 percent of their assets. Royce’s bill would raise that cap to 27.5 percent, a move that would make an estimated $13 billion available to small businesses nationwide, translating to the creation of 140,000 new jobs.

Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.), meanwhile, are expected to introduce the Capital Access for Small Businesses and Jobs Act this afternoon. The bill would authorize the National Credit Union Administration (NCUA) to allow qualified credit unions to accept supplemental capital, which would allow credit unions to enhance member services in a number of ways, including accepting more members, increasing deposits, and opening new branch locations. This will create more affordable credit for members, giving consumers and businesses the tools and financial backing they need to grow the economy and create jobs in their communities.

If this sounds familiar, that just means you’ve been paying attention—nearly identical versions of both bills were introduced last year as well. Senate Majority Leader Harry Reid (D-Nev.) promised publicly in March to give the MBL bill a vote on the Senate floor, and credit unions around the nation spent much of the year pouring time and resources into a coordinated campaign to generate support.

By year’s end, the Small-Business Lending Enhancement Act had built measurable bi-partisan support, with 144 co-sponsors in the House and 21 in the Senate. The much-anticipated Senate vote never materialized, however, and S. 2231 died along with the end of last fall’s session.

But according to Jennifer Wagner, vice president of legislative advocacy for the Northwest Credit Union Association (NWCUA), the progress and momentum built in 2012 puts the new versions of both bills on stronger footing than their predecessors. Reps. Kurt Schrader (D-Ore.), Earl Blumenauer (D-Ore.) and Suzanne Bonamici (D-Ore.) have already signed on as original co-sponsors of the MBL bill, and Blumenauer and Bonamici are among the supplemental capital bill’s co-sponsors as well.

“We made significant progress in Congress in 2012,” Wagner said. “We have strong support from our Northwest delegation, and with the amount of time the entire credit union movement spent last year educating lawmakers and solidifying relationships, we are not starting from scratch with either bill. Their introduction is well-timed with our upcoming visit to Washington, D.C., for the CUNA GAC, when 4,000 credit union leaders from across the country deliver their priorities to Congress.”

More details on both bills will be available in the coming days, but in the meantime, the focus for credit unions remains the same.

“We believe Congress should act now in support of two initiatives that would allow credit unions to better serve their nearly 96 million members. The Capital Access for Small Business and Jobs Act would provide well-managed credit unions the same flexibility other cooperatives have to raise alternative means of capital, which would allow them to provide consumers with affordable credit,” said Troy Stang, NWCUA president and CEO. “The Member Business Lending legislation we support would allow well-managed credit unions to loan more of their assets to small businesses on Main Street, which are fueling job growth.”


Questions? Contact a member of the Association’s Legislative Affairs team:

Jennifer Wagner, Vice President of Legislative Advocacy
Mark Minickiello, Vice President of Legislative Affairs
Pam Leavitt, Policy Advisor

Posted in Advocacy News.