SENATE BILL: Access to Credit for Small Businesses Act (Passed)

[Southern Senator North Carolina Yankee]

A BILL
To remove the credit union commercial lending cap

Be it enacted by the Congress of the Republic of Atlasia assembled

Section 1. Title

This legislation may be cited as the Access to Credit for Small Businesses Act.

Section 2. Definitions

In this Act:

1. CREDIT UNION - The term "credit union" refers to a member-owned, non-profit financial cooperative, controlled by its members and operated on the principle of people helping people, providing its members credit at competitive rates as well as other financial services, are exempt from paying corporate income tax on their earnings, and whose accounts are insured by the National Credit Union Administration.

Section 3. Removal of credit union lending cap

1. To ensure that all available business credit is deployable during and after the COVID-19 crisis:

(A) The 12.5% cap on total assets for credit union members' business lending portfolios shall be eliminated, provided that the extension of credit does not seriously threaten the safety and soundness of the insured credit union.

Section 4. Rulemaking

Not later than the end of the 30-day period beginning on the date of the enactment of this Act, the National Credit Union Administration Board shall issue regulations to define when such extension of credit does not seriously threaten the safety and soundness of the applicable insured credit union.

Sponsor: Scott
Senate Designation: SB27:07

[Southern Senator North Carolina Yankee]

Initial Debate Period is starting, the sponsor has 24 hours to advocate and other Senators 48 hours to respond.

[The world will shine with light in our nightmare]

Under current law, credit unions’ member business lending portfolios cannot exceed 12.25% of total assets. This severely constricts credit unions’ ability to make business loans to their member depositors, and in response to the COVID-19 crisis, the US Congress is considering legislation to temporarily lift the cap so that credit unions have more flexibility in supporting local small businesses.

This bill goes a step further and eliminates the cap permanently. Proposals to do so in the US have been unsuccessful, largely because of strong pushback from big banks. The original cap was imposed in the late 1990s as a concession to bankers.

The credit union industry has grown in the years since the Great Recession, largely due to mistrust in the banking industry. And the reason for this is simple: unlike banks, credit unions do not have customers; they are member-owned and any income generated is used to fund projects and services that benefit the community and the interests of its members. While they lack the infrastructure of large banks, they offer members access to better rates and more ATM locations.

Eliminating this cap will simultaneously eliminate barriers for small and local businesses and promote credit unions as an attractive alternative to big banks, and provide credit unions more flexibility to help their members and small businesses weather the ongoing pandemic.

[Southern Senator North Carolina Yankee]

Was this at all altered by previous Atlasia legislation? I remember a Credit union bill from a year or so ago?

[The world will shine with light in our nightmare]

Was this at all altered by previous Atlasia legislation? I remember a Credit union bill from a year or so ago?

The only post-reset credit union legislation I can find is the Credit Unions Are Good Act, which was a good first step in reducing regulations on credit unions (particularly mortgage caps and it eliminated a redundant risk pool that credit unions were required to maintain from distributions, even though they are already insured by the NCUA.)

[Blair]

Is there any risk that reducing the cap completely (rather than suspending it & bringing it back later at a higher level) might led to reckless decisions & people losing out?

I only ask because I'm naturally in favour of them & think they're a great idea; so I'm aware of my own biases in a sense and the risks that could emerge

[The world will shine with light in our nightmare]

Is there any risk that reducing the cap completely (rather than suspending it & bringing it back later at a higher level) might led to reckless decisions & people losing out?

I only ask because I'm naturally in favour of them & think they're a great idea; so I'm aware of my own biases in a sense and the risks that could emerge

The NCUA will only lift the cap if they determine that doing so doesn't hurt the safety and soundness of the credit union. Credit unions' assets are insured the same way banks' are by the FDIC.

[Blair]

That's reassuring; this bill has my full support

[Southern Senator North Carolina Yankee]

Any other concerns here?

[The world will shine with light in our nightmare]

Motion for a final vote.

[Southern Senator North Carolina Yankee]

Senators have 24 hours to object.

[Southern Senator North Carolina Yankee]

A Final Vote is now open on this legislation, Senators please vote Aye, Nay or Abstain.

[Southern Senator North Carolina Yankee]

AYE

[At-Large Senator LouisvilleThunder]

Aye

[Former President tack50]

Aye

[The world will shine with light in our nightmare]

Aye

[Blair]

Aye

[Southern Senator North Carolina Yankee]

Vote on Final Passage of the Access to Credit for Small Businesses Act:

Aye (5): Blair, LT, NC Yankee, Scott and Tack50
Nay (0):
Abstain (0):

Didn't Vote (0):

This has passed the Senate and is sent to the VP for house action.

[Southern Senator North Carolina Yankee]

A BILL
To remove the credit union commercial lending cap

Be it enacted by the Congress of the Republic of Atlasia assembled

Section 1. Title

This legislation may be cited as the Access to Credit for Small Businesses Act.

Section 2. Definitions

In this Act:

1. CREDIT UNION - The term "credit union" refers to a member-owned, non-profit financial cooperative, controlled by its members and operated on the principle of people helping people, providing its members credit at competitive rates as well as other financial services, are exempt from paying corporate income tax on their earnings, and whose accounts are insured by the National Credit Union Administration.

Section 3. Removal of credit union lending cap

1. To ensure that all available business credit is deployable during and after the COVID-19 crisis:

(A) The 12.5% cap on total assets for credit union members' business lending portfolios shall be eliminated, provided that the extension of credit does not seriously threaten the safety and soundness of the insured credit union.

Section 4. Rulemaking

Not later than the end of the 30-day period beginning on the date of the enactment of this Act, the National Credit Union Administration Board shall issue regulations to define when such extension of credit does not seriously threaten the safety and soundness of the applicable insured credit union.

People's Regional Senate
Passed 5-0 in the Atlasian Senate Assembled,

[The world will shine with light in our nightmare]

DC didn't vote on this, FWIW.