Rule change: CUs to no longer count any loans for 1-to-4-unit dwellings as business loans

In one of the first changes made as a result of the new regulatory relief law enacted just last week, the federal regulator of credit unions announced Friday it had altered its business lending rules to conform with the new law.

The National Credit Union Administration (NCUA) Board said Friday that it voted earlier in the week (Wednesday) by notation to change its rules to effectively exclude all loans made on any 1-to-4-unit family dwelling from a federally insured credit union’s member business loan (MBL) cap.

The change takes effect upon publication in the Federal Register.

The rule change implements a provision contained in the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155). The act removes an occupancy requirement for loans secured by liens on 1-to-4-unit family dwellings to be excluded. Previously, the NCUA’s MBL rule required such dwellings to be the primary residence of a member to be excluded from a credit union’s MBL cap.

The MBL cap for credit unions is established under the Federal Credit Union Act.

NCUA, in a release Friday, said the agency board approved its rule change by notation vote May 30.

NCUA Final Rule

NCUA press release: Board Approves Changes to Member Business Lending Rule