NCUA's Johnson Educates Virginia CUs on FOM Amendments and MBL Proposal

NORFOLK, Va.- NCUA Vice Chair JoAnn Johnson took the opportunity during an address to the Virginia Credit Union League’s 69th Annual Meeting to outline the agency’s recent changes to the Chartering and Field of Membership Manual and the proposed member business lending rule. Johnson explained that the new chartering and field of membership changes standardize what constitutes a local community and offer a new trade, industry and profession (TIP) option for single common bond credit unions, as well as other updates to the rule to make the federal charter more competitive. The vice chair emphasized that the member business lending proposal is in line with President George W. Bush’s goal of strengthening small businesses. The rule would exempt loan participations sold and purchased without recourse from the 12.25% of assets cap on business lending, permit unsecured business loans, and allow credit union service organizations to originate member business loans, among other things. These proposed authorities provide credit unions the opportunity to help jumpstart the nation’s economy by allowing small businesses greater access to capital. The member business lending rule was issued with a 60-day comment period. “It is important that, as regulators, we hear from the credit unions that are impacted by the regulations we enforce,” Johnson said.