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H.R.1418 - Small Business Lending Enhancement Act of 2011
To amend the Federal Credit Union Act to provide certain credit unions with the authority to make additional member business loans, and for other purposes.
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Mr. ROYCE (for himself, Mrs. MCCARTHY of New York, Mr. JOHNSON of Georgia, Mr. PETERS, and Mr. CARNAHAN) introduced the following bill; which was referred to the Committee on Financial ServicesCommentsClose CommentsPermalink
SECTION 1. SHORT TITLE.
SEC. 2. LIMITS ON MEMBER BUSINESS LOANS.
(1) REVISED LIMITATION AND CRITERIA- Effective 6 months after the date of enactment of this Act, section 107A(a) of the Federal Credit Union Act (
‘(1) IN GENERAL- Except as provided in paragraph (2), an insured credit union may not make any member business loan that would result in the total amount of such loans outstanding at that credit union at any one time to be equal to more than the lesser of--CommentsClose CommentsPermalink
‘(2) ADDITIONAL AUTHORITY- The Board may approve an application by an insured credit union upon a finding that the credit union meets the criteria under this paragraph to make 1 or more member business loans that would result in a total amount of such loans outstanding at any one time of not more than 27.5 percent of the total assets of the credit union, if the credit union--CommentsClose CommentsPermalink
‘(A) had member business loans outstanding at the end of each of the 4 consecutive quarters immediately preceding the date of the application, in a total amount of not less than 80 percent of the applicable limitation under paragraph (1);CommentsClose CommentsPermalink
‘(3) EFFECT OF NOT BEING WELL CAPITALIZED- An insured credit union that has made member business loans under an authorization under paragraph (2) and that is not, as of its most recent quarterly call report, well capitalized, may not make any member business loans, until such time as the credit union becomes well capitalized, as reflected in a subsequent quarterly call report, and obtains the approval of the Board.’.CommentsClose CommentsPermalink
(1) TIERED APPROVAL PROCESS- The Board shall develop a tiered approval process, under which an insured credit union gradually increases the amount of member business lending in a manner that is consistent with safe and sound operations, subject to the limits established under section 107A(a)(2) of the Federal Credit Union Act (as amended by this Act). The rate of increase under the process established under this paragraph may not exceed 30 percent per year.CommentsClose CommentsPermalink
(2) RULEMAKING REQUIRED- The Board shall issue proposed rules, not later than 6 months after the date of enactment of this Act, to establish the tiered approval process required under paragraph (1). The tiered approval process shall establish standards designed to ensure that the new business lending capacity authorized under the amendment made by subsection (a) is being used only by insured credit unions that are well-managed and well capitalized, as required by the amendments made under subsection (a) and as defined by the rules issued by the Board under this paragraph.CommentsClose CommentsPermalink
(A) IN GENERAL- Not later than 3 years after the date of enactment of this Act, the Board shall submit a report to Congress on member business lending by insured credit unions.CommentsClose CommentsPermalink
(v) the effect of this section on the number of insured credit unions engaged in member business lending, any change in the amount of member business lending, and the extent to which any increase is attributed to the change in the limitation in section 107A(a) of the Federal Credit Union Act, as amended by this Act;CommentsClose CommentsPermalink
(vi) the number, types, and asset size of insured credit unions that were denied or approved by the Board for increased member business loans under section 107A(a)(2), as amended by this Act, including denials and approvals under the tiered approval process;CommentsClose CommentsPermalink
(vii) the types and sizes of businesses that receive member business loans, the duration of the credit union membership of the businesses at the time of the loan, the types of collateral used to secure member business loans, and the income level of members receiving member business loans; andCommentsClose CommentsPermalink
(B) REPORT- Not later than 3 years after the date of enactment of this Act, the Comptroller General shall submit a report to Congress on the study required by subparagraph (A).CommentsClose CommentsPermalink