For the last five and a half years, I and other NCUA Board members have supported legislation in Congress that would increase the amount credit unions may lend for member business loans. We have written letters to and testified before Congress, published articles and columns and spoken at events across the country in support of new MBL limits for credit unions. Despite the support of the regulator and the efforts of the credit union industry, Congress has not yet acted.
As a result of still being where we were five and a half years ago, many credit unions have been unable to encourage additional member business loans, small businesses have been stymied and the economy of this country has not been given another tool to help it move forward.
When those who should act do not, and there are others in a position to do so, they must step forward and take action.
The NCUA as the regulator of federally chartered credit unions is in a unique position to amend and improve its MBL regulation to benefit credit unions and small businesses across this country looking to grow and expand.
NAFCU recently wrote all three NCUA Board members and offered an array of suggestions on how the agency could improve its MBL requirements.
Those suggestions included the following:
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Create an exception from the MBL cap for all credit unions have a history of making MBLs for an extended period of time.
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Provide appropriate guidance to comply with any exceptions granted.
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Allow healthy, well-run credit unions with risk-focused MBL programs, having appropriate policies and procedures requiring adequate due diligence on their member borrowers, to apply for and obtain blanket waivers.
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Amend the regulation to expand a credit union's ability to obtain an individual blanket waiver.
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Consider a flexible waiver provision.
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Reconsider and perhaps shorten the five-year relationship for obtaining waivers of the personal guarantee requirement.
In my opinion, these suggestions are all worthy of consideration, study and review by the NCUA Board. Changes included in all or even a few of these proposals will increase the availability of safe and sound MBLs in the marketplace that will benefit credit union members, the credit union industry and our nation's economy.
To quote former President Ronald Reagan, "I know it's a hell of a challenge, but ask yourselves, if not us, who? If not now, when?" It's time for the NCUA Board to step up and take action on this long overdue issue.
Michael Fryzel
Board Member
NCUA
Alexandria, Va.
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