NCUA Board to Propose MBL Rule at June Board Meeting

The National Credit Union Administration is expected to propose the much anticipated member business lending (MBL) rule at their June 18th board meeting. A number of other important items are also on the agenda, including loans in areas having special flood hazards, an Interpretive Ruling and Policy Statement on minority depository institutions, regulatory review, and the federal credit union interest rate ceiling policy.

At the CUNA Governmental Affairs Conference in March, NCUA chair Debbie Matz indicated that the NCUA was going to move away from a highly prescriptive, one-size-fits-all approach to business lending. Matz stated that the NCUA board intended to remove the personal guarantee requirement as well as unnecessary limits on construction and development loans.

“The expected changes would give credit unions parity with other types of financial institutions on specific, outlined aspects of business lending, however statutory limitations on business lending continue to restrain credit unions,” said John Trull, associate vice president of regulatory advocacy for the Association. “We look forward to reviewing the proposal and hope that the NCUA will respect the dual charter system and the principles of Federalism.”

Credit unions will have the opportunity to comment on this key initiative once the rule is published in the Federal Register.

The NCUA board is also expected to finalize the interagency rule on loans in areas having special flood hazards. The final rule will likely exempt certain detached structures on residential properties from the mandatory flood insurance requirement and will implement the statutory requirement for financial institutions over $1 Billion to escrow flood insurance premiums and fees.

The board plans to finalize an Interpretive Ruling and Policy Statement (IRPS) on the Minority Depository Institution Preservation Program.

“The Association strongly supports programs, services, and funding for culturally-specific credit unions,” said Trull. “Minority Depository Credit Unions are important as they have the trust of the communities they serve.”

See the Association Letter on Minority Depository Institutions for more.

Other important issues on the NCUA agenda include:

  • Reviewing the Federal Credit Union Loan Interest Rate Ceiling.
  • Proposing a regulatory review in accordance with the Economic Growth and Regulatory Paperwork Reduction Act. This is the third of the congressionally mandated ten-year comprehensive regulatory reviews that will result in a report to Congress.
  • Board Briefing, Final Interagency Policy Statement Establishing Joint Diversity Assessment Standards.

For more information, visit the NCUA website.

Questions about this story? Contact James Pearson: 206.340.4790,

Posted in Advocacy News, NCUA.