Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.) has co-sponsored a bipartisan bill introduced by Ron Wyden (D-Ore.) and Lisa Murkowski (R-Alaska) that would boost local economies and businesses by providing small business owners and potential homeowners better access to financial capital through credit unions. Senator Edward J. Markey (D-Mass.) also cosponsored the legislation.
The Credit Union Residential Loan Parity Act, S.836, would spur home ownership and 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 for both home loans and small business loans.
“This bipartisan bill is a straightforward way to encourage home ownership and boost the local economy in Massachusetts, especially our gateway cities,” Warren said. “Credit unions play a key role in our communities, and this legislation will make it easier for them to support small businesses and families looking to buy homes.”
“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. Exempting these loans from the business cap frees up more capital for small business lending and allows credit unions to offer mortgage credit at lower rates.
The bill is supported by the Northwest Credit Union Association, the Credit Union National Association, the Cooperative Credit Union 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.
Find the bill text here.
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