Press
Letter supports credit union residential loan parity act
March 14, 2014
The Honorable Ed Royce
Member of Congress
United States House of Representative
Washington, DC 20515
The Honorable Jared Huffman
Member of Congress
United States House of Representatives
Washington, DC 20515
Dear Representatives Royce and Huffman:
On behalf of the Credit Union National Association (CUNA), I am writing in support of H.R. 4226, the Credit Union Residential Loan Parity Act. CUNA is the largest credit union advocacy organization in the United States, representing America’s 6,500 state and federally chartered credit unions and their 99 million members. Thank you very much for introducing this legislation.
Your legislation addresses a disparity in the treatment of certain residential loans made by banks and credit unions. When a bank makes a loan to purchase a 1-4 unit non-owner occupied residential dwelling, the loan is classified as a residential real estate loan; however, if a credit union were to make the same, it would be classified as a business loan and therefore would be subject to the cap on member business lending under the Federal Credit Union Act. H.R. 4226 would amend the Federal Credit Union Act to provide an exclusion from the cap for these loans. In addition, H.R. 4226 would authorize the National Credit Union Administration to apply strict underwriting and servicing requirements for the loans.
Enactment of this legislation would not only correct this disparity but it would also enable credit unions to provide additional credit to borrowers seeking to purchase residential units, including low-income rental units. Credit unions would be better able to meet the needs of their members, if this bill was enacted, and it would also contribute to the availability of affordable rental housing.
On behalf of America’s credit unions, thank you for introducing this legislation. We look forward to working with you to see its enactment.
Best regards,
Bill Cheney
President & CEO
Credit Union Natl. Assn. (CUNA)
Washington, DC