Thanks to NCUA’s Member Business Lending (MBL) rule, it has never been easier for credit unions to enter the commercial lending market.
The rule forgoes most prior prescriptive limits in favor of a more flexible and business-friendly “principles-based” philosophy.
But commercial lending is not the same as consumer lending, and credit unions should approach this as an entirely separate business practice.
One of the main differences is that commercial lending requires considerable guidance from the board of directors. According to the MBL rule, “A credit union’s board of directors is ultimately accountable for the safety and soundness of the credit union’s commercial lending activities.”