The way that credit unions offer member business loans (MBL) will be changing later this year. The NCUA has published its MBL rule in the Federal register making it not only official but changing some requirements. One of the major pieces of the rule is personal guarantee. Sixty days after the rule is published in the federal register the personal guarantee requirement will be eliminated.
At last month’s NCUA board meeting, the new MBL rule passed unanimously. Most pieces of the rule will go into effect Jan. 1, 2017, except the personal guarantee which goes into affect May 13, 2016. The final rule modernizes member business lending and removes prescriptive limits that were put in place as credit unions were first beginning business lending.
The NCUA has resources to better understand the final MBL rule. Read a summary of the final rule and a side-by-side comparison of the old and new rule on the NCUA’s website.