The NCUA approved on June 18 a series of proposed rule changes that will make it easier for credit unions to lend to businesses. Part of the proposed rule change eliminates a “requirement that borrowers personally guarantee loans, as well as a provision that imposes an 80 percent loan-to value cap on collateral used to secure a loan”. In addition, it will eliminate conditions that limit construction and development lending. The Credit Union Journal stated that "under the proposed rule, loans to a single borrower could total as much as 25 percent of a lender`s net worth, as long as the portion of the loan above the 15 percent net-worth —threshold is secured by readily marketable collateral".
Another important change will be the elimination of the waiver process that has been said by NCUA Vice-Chairman Rick Metsger to be “cumbersome [and that credit union] have lost business to other lenders as a result”. The waiver process will be replaced with a business lending policy in writing and a credit risk rating system to evaluate individual business loans.
The next step in the process is to consider the proposed changes and back and forth communication between NCUA and state regulators according to Alicia Nealon, director of regulatory affairs. The NCUA will accept comments for 60 days before preparing a final version of this proposal draft.
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Reost, Mark "NCUA Approves Big Changes to Member Business Lending Rule." Credit Union Journal, 18 June 2015.