What Is the MBL Cap on Credit Unions?

Credit unions have business lending limits.

Credit unions are financial organizations owned by their members and regulated by the National Credit Union Association. Credit unions are subject to caps on member business lending. These MBL caps limit loans that can be made for business.

Credit Union Membership Access Act

The Credit Union Membership Access Act of 1998 expanded citizens' access to credit unions, in the wake of a Supreme Court decision that had limited such access. As part of the act, Congress placed lending limits on business lending by credit unions.

Member Business Lending Caps

The MBL caps set by Congress limit lending based on the assets or net worth of the credit union. A well-capitalized credit union can lend up to 1.75 times its net worth or 12.25 percent of total assets, whichever is less.

State MBL Caps

The National Credit Union Association can exempt federally insured credit unions from the federal MBL caps, if the states in which they are chartered have their own approved MBL caps. As of November 2010, qualifying MBL caps were in place in Connecticut, Maryland, Oregon, Texas, Washington and Wisconsin.

References

• NCUA: Member Business Lending
• NAFCU: Member Business Lending
• The American Presidency Porject: Statement on Signing the Credit Union Membership Access Act

Resources

• National Credit Union Association
• National Association of Federal Credit Unions