U.S. Sens. Catherine Cortez Masto (D-NV) and Kevin Cramer (R-ND) introduced a bill that would give credit unions more flexibility when lending for non-primary loans.
The Expanding Access to Lending Options Act would permit federally chartered credit unions to permit loan maturity periods for up to 20 years.
Except for primary residences, federally chartered credit unions are not permitted to issue loans for a period longer than 15 years. However, banks and most state-chartered credit unions are not subjected to the same limitation.
“Credit unions provide essential services to communities across the Silver State, particularly in rural and underserved areas,” Cortez Masto said. “My bipartisan bill would provide a commonsense, simple fix that helps people finance their dreams.”
Nevada has two federally chartered credit unions that would be impacted by this bill — the Great Basin Federal Credit Union and the Elko Federal Credit Union.
“Increasing the loan maturity limit for federally chartered credit unions will greatly help the Elko Federal Credit Union,” Todd Sorenson, president and CEO of Elko Federal Credit Union, said. “When interest rates are low, consumers shop around: they want the certainty of a lower rate for a longer term. It’s in this environment that federal credit unions are less competitive. Many customers seeking loans at our credit union have pursued other loan options when we communicate the maturity date limitation.”
Lucy Ito, interim CEO of Nevada’s Credit Unions, said the bill would expands lending options for much-needed products, including mortgages for multi-family housing units and small business loans.
“We thank Senators Cortez Masto and Cramer for understanding the importance of loan maturity flexibility that will enhance credit unions’ ability to offer loans at better rates and terms consumers want. Legislation like this enhances credit unions’ ability to help Americans make ends meet. America’s Credit Unions urges the Senate to pass this bill without delay,” Scott Simpson, president and CEO of America’s Credit Unions, said.