[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2028 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                S. 2028

To amend the Federal Credit Union Act, to advance the ability of credit 
   unions to promote small business growth and economic development 
                 opportunities, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 10, 2015

  Mr. Paul (for himself, Mr. Whitehouse, and Mr. Reed) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To amend the Federal Credit Union Act, to advance the ability of credit 
   unions to promote small business growth and economic development 
                 opportunities, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; DEFINITIONS.

    (a) Short Title.--This Act may be cited as the ``Small Business 
Lending Enhancement Act of 2015''.
    (b) Definitions.--In this Act--
            (1) the term ``Board'' means the National Credit Union 
        Administration Board;
            (2) the term ``insured credit union'' has the same meaning 
        as in section 101 of the Federal Credit Union Act (12 U.S.C. 
        1752);
            (3) the term ``member business loan'' has the same meaning 
        as in section 107A(c)(1) of the Federal Credit Union Act (12 
        U.S.C. 1757a(c)(1));
            (4) the term ``net worth'' has the same meaning as in 
        section 107A(c)(2) of the Federal Credit Union Act (12 U.S.C. 
        1757a(c)(2)); and
            (5) the term ``well capitalized'' has the same meaning as 
        in section 216(c)(1)(A) of the Federal Credit Union Act (12 
        U.S.C. 1790d(c)(1)(A)).

SEC. 2. LIMITS ON MEMBER BUSINESS LOANS.

    Effective 6 months after the date of enactment of this Act, section 
107A(a) of the Federal Credit Union Act (12 U.S.C. 1757a(a)) is amended 
to read as follows:
    ``(a) Limitation.--
            ``(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--
                    ``(A) 1.75 times the actual net worth of the credit 
                union; or
                    ``(B) 12.25 percent of the total assets of the 
                credit union.
            ``(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--
                    ``(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);
                    ``(B) is well capitalized, as defined in section 
                216(c)(1)(A);
                    ``(C) can demonstrate at least 5 years of 
                experience of sound underwriting and servicing of 
                member business loans;
                    ``(D) has the requisite policies and experience in 
                managing member business loans; and
                    ``(E) has satisfied other standards that the Board 
                determines are necessary to maintain the safety and 
                soundness of the insured credit union.
            ``(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 defined in section 
        216(c)(1)(A)), as reflected in a subsequent quarterly call 
        report, and obtains the approval of the Board.''.

SEC. 3. IMPLEMENTATION.

    (a) 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 
(12 U.S.C. 1757a(a)(2)), as amended by this Act. The rate of increase 
under the process established under this paragraph may not exceed 30 
percent per year.
    (b) 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 subsection (a). 
The tiered approval process shall establish standards designed to 
ensure that the new business lending capacity authorized under section 
107A(a) of the Federal Credit Union Act (12 U.S.C. 1757a(a)), as 
amended by this Act, is being used only by insured credit unions that 
are well-managed and well capitalized, as required under section 
107A(a) of the Federal Credit Union Act (12 U.S.C. 1757a(a)), as 
amended by this Act, and as defined by the rules issued by the Board 
under this subsection.
    (c) Considerations.--In issuing rules required under this section, 
the Board shall consider--
            (1) the experience level of the institutions, including a 
        demonstrated history of sound member business lending;
            (2) the criteria under section 107A(a)(2) of the Federal 
        Credit Union Act (12 U.S.C. 1757a(a)(2)), as amended by this 
        Act; and
            (3) such other factors as the Board determines necessary or 
        appropriate.

SEC. 4. REPORTS TO CONGRESS ON MEMBER BUSINESS LENDING.

    (a) Report of the Board.--
            (1) 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.
            (2) Report.--The report required under paragraph (1) shall 
        include--
                    (A) the types and asset size of insured credit 
                unions making member business loans and the member 
                business loan limitations applicable to the insured 
                credit unions;
                    (B) the overall amount and average size of member 
                business loans by each insured credit union;
                    (C) the ratio of member business loans by insured 
                credit unions to total assets and net worth;
                    (D) the performance of the member business loans, 
                including delinquencies and net charge offs;
                    (E) the effect of this Act and the amendments made 
                by this Act 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 (12 U.S.C. 1757a(a)), as amended by this Act;
                    (F) 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) of the Federal Credit Union Act (12 U.S.C. 
                1757a(a)(2)), as amended by this Act, including denials 
                and approvals under the tiered approval process;
                    (G) 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; and
                    (H) the effect of any increases in member business 
                loans on the risk to the National Credit Union Share 
                Insurance Fund and the assessments on insured credit 
                unions.
    (b) GAO Study and Report.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study on the status of member business lending 
        by insured credit unions, including--
                    (A) trends in such lending;
                    (B) types and amounts of member business loans;
                    (C) the effectiveness of this section in enhancing 
                small business lending;
                    (D) recommendations for legislative action, if any, 
                with respect to such lending; and
                    (E) any other information that the Comptroller 
                General considers relevant with respect to such 
                lending.
            (2) 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 under paragraph (1).
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