ALEXANDRIA, Va.—The NCUA board has unanimously approved, by notation vote, a change to the member business lending rule that removes the member’s occupancy requirement for loans secured by liens on one-to-four-unit family dwellings.
The member business lending rule previously required those dwellings to be the primary residence of a member in order to be excluded.
As a result, federally insured credit unions will no longer have to count loans made on any one-to-four-unit family dwellings as member business loans. As such, these loans will not count towards the aggregate member business loan cap imposed on each federally insured credit union, NCUA noted.
The NCUA board said it approved the change to make the member business lending rule conform with changes to the Federal Credit Union Act incorporated into the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, signed into law by President Donald J. Trump on May 24. As CUToday.info has reported, credit unions will make more MBL loans and will face less paperwork when writing loans for non-owner-occupied dwellings with up to four units, thanks to this change.
"This is a great change for credit unions, and we applaud NCUA Chairman [Mark] McWatters and Board Member [Rick] Metsger for acting quickly following the passage of S. 2155," said NAFCU President and CEO Dan Berger. "Credit unions will receive some relief under member business lending requirements for the first time in almost 20 years, and now, thanks to the NCUA diligently making its language consistent with the new law, credit unions can immediately make loans secured by a one-to-four family dwelling to benefit their members."
The final rule, available online here, will become effective upon publication in the Federal Register.