Saying that federal law hampers lending by credit unions, two senators have introduced legislation that would increase the loan maturity cap of 15 years on credit union loans to 20 years.
Sens. Tim Scott (R-S.C.) and Catherine Cortez Masto (D-Nev.) have pushed similar legislation in the past, but Cortez Masto said the pandemic has increased the need for credit unions to have more flexibility to offer loans to members.
S. 762, introduced Tuesday, would allow the cap increase at the discretion of the National Credit Union Administration board. A companion bill has not yet been introduced in the House.
“Credit unions are a key part of the economic ecosystem, and the services they provide make a positive and personalized difference in the financial lives of millions of Americans,” Scott said. “This bill provides important regulatory flexibility to allow credit unions to offer a wider choice of products and services to more effectively meet the credit needs of their members and communities.”
“Credit unions offer opportunity to many Nevadans, allowing them to buy a home, pay for an education, or start a business,” Cortez Masto added. “As Nevada recovers from the coronavirus pandemic and looks to a robust recovery, it’s even more important to give hardworking families flexible credit options.”
Credit union trade groups immediately endorsed the legislation, saying if passed, credit unions would be able to offer expanded options to members.
“The coronavirus pandemic has underlined the need for several reforms to ensure credit unions can provide products and services that meet members’ needs, and providing the NCUA flexibility for maturity products and removing restrictive requirements on certain loans is a step in the right direction,” said National Association of Federally-Insured Credit Unions President/CEO B. Dan Berger
“This bill by Senators Cortez-Masto and Scott will help create more opportunities for those seeking opportunities to access affordable credit options and grow their financial future,” said Credit Union National Administration President/CEO Jim Nussle.