Connecticut House Bill HB05404

Connecticut 2018 Regular Session

• Introduced: 3/1/18
• Refer: 3/1/18

Caption

An Act Concerning The Authority Of Connecticut Credit Unions To Make Member Business Loans That Meet Certain Federal Requirements.

Impact

If enacted, this legislation will primarily affect the statutes surrounding credit unions and their business lending practices. By allowing credit unions to issue member business loans, the bill increases the potential access to capital for small businesses within the community. This change could stimulate local economic growth and entrepreneurship, as credit unions often operate with a member-focused approach and may offer more favorable terms compared to larger financial institutions.

Summary

House Bill 05404, titled 'An Act Concerning The Authority Of Connecticut Credit Unions To Make Member Business Loans That Meet Certain Federal Requirements', seeks to amend existing statutes governing the lending authority of Connecticut credit unions. The bill permits credit unions to issue member business loans, provided these loans are compliant with federal regulations such as 12 USC Section 1757a and 12 CFR Part 723. The goal is to enhance the business lending capabilities of credit unions, particularly those with fewer than $250 million in assets, while ensuring adherence to specific safety and soundness principles.

Contention

Discussions around HB 05404 have raised points of contention regarding the implications of expanding credit unions' lending powers. While supporters argue that this will provide vital resources to small businesses, critics have expressed concerns about the risks associated with increased lending. There are apprehensions that without strict oversight, the quality of loans could decline, potentially impacting the financial stability of credit unions and their members. Discussion of the bill suggests a need for ongoing oversight to ensure that credit unions can manage the inherent risks in business lending effectively.