In a comment letter to the National Credit Union Administration (NCUA), the Community Bankers Association of Illinois (CBAI) expressed its unequivocal objection to their unprecedented proposal, which would comprehensively rewrite the credit union member business lending (MBL) rule, and recommended its withdrawal.
The NCUA proposal would circumvent the plain language of the Federal Credit Union Act, strip away critical prudential safeguards, and create new exceptions to the MBL cap. The NCUA proposal amounts to an end-run around Congress by a “cheerleader” regulator that is captive to the most aggressive, multi-billion dollar credit unions.
Credit union MBL powers are highly controversial. Any sweeping changes to the MBL rule should invoke vigorous Congressional oversight, including hearings. If any form of this proposal is enacted it should trigger an immediate review of the credit union tax exemption. Read Comment Letter.