New Legislation Would Exclude Loans to Veterans from MBL Cap

A bill introduced in the House this week could provide some relief to credit unions approaching the member business lending cap, reports the Credit Union Journal.

The Veterans Member Business Loan Act, introduced Wednesday, would exclude loans made to veterans from counting toward the MBL cap. Credit unions presently are limited to member business loans equal to the lesser of 12.25 percent of their assets or 1.75 times net worth.

The bipartisan bill was brought by Vicente Gonzalez (Texas-15), Don Young (Alaska-At Large), Paul Cook (Calif.-08) and Tulsi Gabbard (Hawaii-02). It proposes to amend the Federal Credit Union Act to exclude extensions of credit made to veterans from the definition of a member business loan. Supporters said loans made by a credit union to any veteran who served on active duty and was discharged or released under conditions other than dishonorable would be included.