As CUs Continue to Nibble Away at MBL Cap, What About the Cap Itself?

The credit union trade groups continue to work Congress as they seek to nibble around the edges of the member business loan (MBL) cap in place for federal credit unions, which has now been in place for more than two decades. But will the cap itself ever be removed?

Not anytime in the near future, according to Brad Thaler, VP-legislative affairs with NAFCU.

Instead, credit unions continue to work to get carve-outs from the MBL cap, which was included in 1998’s Credit Union Membership Access Act at the behest of the banking trade associations.

For example, credit unions succeeded in having loans on non-owner occupied homes exempted from the cap.

There are also efforts to have the de minimis cap on loans that are exempted raised from $50,000 to a higher amount.

“Fifty-thousand dollars in 1998 is not $50,000 in 2022,” said Thaler. “There is a good argument to raise that so lines of credit and smaller loans don’t count toward the cap. We keep pushing for ways to lift it where it’s just common sense. But Congress is not going to eliminate it.”

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Related: Nussle: Lift Member Business Loan Cap In Underserved Areas