Credit unions that make loans of $50,000 or more to help musicians buy instruments have to change their tune and consider them member business loans.
NCUA Deputy General Counsel Hattie Ulan gave that message in a legal opinion letter to Bob McGrew, general manager of the $4.5 million, 906-member Houston Musicians Federal Credit Union in Texas.
Even though the IRS doesn't consider interest on these loans to be tax deductible, it's the loan's "actual purpose and amount, absent any applicable exemptions, that determine whether the loan is an MBL,'' Ulan wrote.
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