Washington, D.C. – U.S. Senators Ron Wyden, D-Ore., and Lisa Murkowski, R-Alaska, introduced bipartisan legislation to boost local economies and businesses by providing small business owners better access to financial capital through credit unions.
The Credit Union Residential Loan Parity Act, S.836, would spur business and job growth in local communities by ensuring that small housing project loans do not count toward the business lending cap for credit unions. Removing these loans from the business lending cap would free up capital at credit unions, giving local credit unions more flexibility to lend to small businesses.
“We appreciate Senator Wyden for his efforts to help credit unions free up capital to provide financing for these small business projects,” said Kevin Cole, CFO at Mid Oregon Credit Union. “By introducing this legislation, Senator Wyden has made good on his promise to support affordable housing with a sensible regulatory update for credit unions who are ready able to fund the loans. Credit Unions are uniquely positioned to support the community and small business with this legislative change.”
“This bipartisan bill helps local economies grow,” Wyden said. “It gives local credit unions the flexibility they need to provide small businesses with access to the capital that can grow jobs and businesses in Oregon communities and nationwide.”
“Alaska’s small businesses are the backbone of our local economies,” Murkowski said. “Properly classifying three and four-plex loans for Credit Unions will free up desperately needed capital for additional lending for small businesses in our community. Given the challenges currently facing Alaska, I greatly appreciate this commonsense, bipartisan effort to support those struggling to create jobs and grow our economy.”
Specifically, the bill would exempt loans for one- to four-unit non-owner occupied dwellings from the member business lending cap of 12.5 percent imposed on credit unions. The legislation would allow credit unions to treat loans that qualify for the exemption as residential loans with lower interest rates—similar to how banks make those loans to small businesses.
“Senators Wyden and Murkowski understand that small businesses are the engine of this economy and that credit unions stand ready to provide capital to those small businesses, many who are turned away by other lenders,” said Troy Stang, chief executive officer at the Northwest Credit Union Association. “Pacific Northwest credit unions thank Senators Wyden and Murkowski for their leadership on this important issue and look forward to working with them to ensure its passage.”
Sens. Elizabeth Warren, D-Mass., and Edward J. Markey, D-Mass., also cosponsored the legislation.
In addition to the Northwest Credit Union Association, the bill is supported by the Credit Union National Association and the National Association of Federally-Insured Credit Unions.
Similar legislation has been introduced in the House of Representatives by Rep. Ed Royce, R-Calif.
