Legislation expanding the maturity cap on federal credit union loans was introduced by U.S. Rep. Scott Fitzgerald (R-WI) recently.
The legislation, the Expanding Access to Lending Options Act, would all the National Credit Union Administration Board to increase the credit union loan maturity cap to 20 years, or longer if the Board allows by regulation. It would also allow loan maturities for 1- to 4-unit principal and non-principal residences to be extended to 30 years, officials said.
“As the cost of living continues to rise, families and small businesses need more flexible, affordable lending options,” Fitzgerald said. “This bill gives credit unions the ability to offer longer-term loans, helping borrowers plan for the future and stay on top of their financial obligations without being locked into high monthly payments.”
Credit unions currently are generally prohibited from offering loans that go beyond a 15-year term, with limited exceptions. As costs rise, Fitzgerald’s office said, so does the need for larger loan limits and a longer time to repay them. Allowing the extended maturity limit would lower monthly payments for consumers, Fitzgerald said, while giving credit union’s the ability to compete with other financial institutions.
The legislation is supported by credit unions and other financial institutions.
“Economic uncertainty makes managing finances difficult. With the introduction of legislation to provide credit unions with loan maturity flexibility, Reps. Fitzgerald, Fitzpatrick, Sherman, Meuser, Kim, Vargas, and Timmons are giving 142 million Americans much-needed financial relief,” America’s Credit Unions President/CEO Jim Nussle said. “This bill enhances credit unions’ ability to offer loans at rates and terms that fit their members’ needs. Credit unions are a safe haven for Americans trying to make ends meet and invest in their future. We thank the lawmakers for introducing this bipartisan legislation, and we urge the House to quickly advance it.”