The National Credit Union Administration will work with the federal Export-Import Bank to help link credit unions with exporters in need of credit, the two agencies announced Tuesday.
The memorandum of understanding emphasizes that since the loans that would be made by credit unions would be guaranteed by the Ex-Im Bank, the loans would be allowed to fall outside the financial institutions’ Member Business Lending cap. The Ex-Im Bank is an independent federal agency that provides exporters with federal loan guarantees.
“Under this agreement, we’ll be working with Ex-Im to develop educational and training initiatives on export financing opportunities to share with credit unions, so they can educate their small-business members about the available opportunities, such as an Ex-Im guaranteed loan being exempt from the member business cap of 12.25 percent,” NCUA Chairman Rodney Hood said during a signing ceremony with Ex-Im Bank Chairwoman Kimberly Reed.
Hood said that not all credit unions serve exporters, but added that “for those that do, knowing where to turn for help with financing, and being able to share that information with small business borrowers, will be a tremendous boon.”
Reed said the three-year initiative is the bank’s first attempt to encourage lending by credit unions.
“This MOU represents Ex-Im’s first-ever targeted outreach to credit unions and their millions of customers and will provide important support to America’s small businesses – especially those that may be exporting for the first time,” Reed said.