WASHINGTON — The financial health of credit unions and NCUSIF could be threatened by easing restrictions on member business loans, the American Bankers Association told the NCUA last week.
Proposed changes would "pose additional risk" because business loans are more likely to cause losses for credit unions.
ABA Senior Economist Keith Leggett said the recent failures of several credit unions were in part the result of losses stemming from the defaults of some of their business loans. And making it easier for credit unions to give out these loans would "increase risks in areas that neither credit unions nor the NCUA have been constituted to manage effectively," he wrote.
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