[Congressional Record Volume 164, Number 40 (Wednesday, March 7, 2018)]
[Senate]
[Page S1473]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 2098. Mr. WHITEHOUSE (for himself and Mr. Sanders) submitted an
amendment intended to be proposed by him to the bill S. 2155, to
promote economic growth, provide tailored regulatory relief, and
enhance consumer protections, and for other purposes; which was ordered
to lie on the table; as follows:
At the appropriate place, insert the following:
SEC. ___. SMALL BUSINESS LENDING ENHANCEMENT.
(a) Definitions.--In this section--
(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)).
(b) 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.''.
(c) Implementation.--
(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 (12 U.S.C. 1757a(a)(2)), as
amended by this section. The rate of increase under the
process established under this paragraph may not exceed 30
percent per year.
(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 section 107A(a) of the
Federal Credit Union Act (12 U.S.C. 1757a(a)), as amended by
this section, 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 section, and as defined by the
rules issued by the Board under this paragraph.
(3) Considerations.--In issuing rules required under this
subsection, the Board shall consider--
(A) the experience level of the institutions, including a
demonstrated history of sound member business lending;
(B) the criteria under section 107A(a)(2) of the Federal
Credit Union Act (12 U.S.C. 1757a(a)(2)), as amended by this
section; and
(C) such other factors as the Board determines necessary or
appropriate.
(d) Reports to Congress on Member Business Lending.--
(1) Report of the board.--
(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.
(B) Report.--The report required under subparagraph (A)
shall include--
(i) 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;
(ii) the overall amount and average size of member business
loans by each insured credit union;
(iii) the ratio of member business loans by insured credit
unions to total assets and net worth;
(iv) the performance of the member business loans,
including delinquencies and net charge offs;
(v) the effect of this section and the amendments made by
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 (12 U.S.C. 1757a(a)),
as amended by this section;
(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) of
the Federal Credit Union Act (12 U.S.C. 1757a(a)(2)), as
amended by this section, including denials and approvals
under the tiered approval process;
(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; and
(viii) 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.
(2) GAO study and report.--
(A) Study.--The Comptroller General of the United States
shall conduct a study on the status of member business
lending by insured credit unions, including--
(i) trends in such lending;
(ii) types and amounts of member business loans;
(iii) the effectiveness of this section in enhancing small
business lending;
(iv) recommendations for legislative action, if any, with
respect to such lending; and
(v) any other information that the Comptroller General
considers relevant with respect to such lending.
(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 under subparagraph
(A).
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