Bipartisan Senate bill would raise loan maturity limits for FCUs

A bipartisan bill introduced Tuesday would amend the Federal Credit Union Act to raise maturity limits for non-mortgage loans at federal credit unions from 15 years to 20 years.

The bill, known as the Expanding Access to Lending Options Act, was sponsored by Sens. Catherine Cortez Masto, D-Nev., and Tim Scott, R-S.C. The pair introduced similar legislation last year, and another bill to extend loan maturity limits was introduced in the House in 2019.

Andrew Harrer/Bloomberg

"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 [National Credit Union Administration] flexibility for maturity products and removing restrictive requirements on certain loans is a step in the right direction,” Dan Berger, president and CEO of the National Association of Federally-Insured Credit Union, said in a statement.

The proposed legislation, “will help create more opportunities for those seeking opportunities to access affordable credit options and grow their financial future,” Jim Nussle, president and CEO of the Credit Union National Association, said in a separate statement.

The NCUA finalized a rule in 2019 reforming rules on loans and lines of credit, and indicated at the time it would continue reviewing comments on other issues related to maturity limits, NAFCU noted. However, the agency’s authority only goes so far, and some changes – including those proposed in the new bill – require amendments to the Federal Credit Union Act.

Earlier this month, members of the House of Representatives introduced a bipartisan bill to provide some exemptions from limits on member business lending for credit unions making loans that help with the economic recovery from the coronavirus crisis.