NCUA Chairman Todd M. Harper Statement on Oregon Member Business Lending Rule

As Prepared for Delivery on September 23, 2021

Thank you, Cherie and Julie, for your presentation on the Oregon Member Business Lending Rule.

The issue before the NCUA Board is whether the Oregon MBL Rule at least covers all the provisions and is no less restrictive than Part 723 of the NCUA’s regulations. I support the staff’s determination that the Oregon MBL Rule at least covers all the provisions and is no less restrictive than the NCUA’s regulations.

In late June, the Oregon Department of Consumer and Business Services submitted a request for the NCUA Board to determine whether the state’s revisions to the Oregon MBL Rule would meet the standards specified in section 723.10(a) of the NCUA’s regulations. Under this section, federally insured, state-chartered credit unions in a given state are exempt from compliance with Part 723 of the NCUA’s regulations if:

"the state supervisory authority administers a state commercial and member business loan rule for use by federally insured credit unions chartered in that state, provided the state rule at least covers all the provisions in this part and is no less restrictive, upon determination by NCUA."

Under a similar provision in an earlier version of Part 723 of the NCUA’s regulations, the NCUA Board determined in June 2002 that Oregon’s current MBL Rule for federally insured, state-chartered credit unions in the state met the exemption standard. The NCUA has since revised its MBL Rule, and Oregon has now updated its regulation to address the changes made by the NCUA Board.

The Western Region — with the concurrence of the Office of Examination and Insurance and the Office of General Counsel — now recommends the NCUA Board determine that the revised Oregon MBL Rule at least covers all the provisions and is no less restrictive than Part 723 of the NCUA’s regulations. Cherie, would you please confirm that this amended Oregon MBL Rule is no less restrictive than the requirements in the NCUA’s member business lending regulation?

Thank you, Cherie. Would you also explain how the amended Oregon MBL Rule is more restrictive than the NCUA’s MBL Rule in the areas of risk classification, policies and procedures, and borrower concentration limits?

Thank you, Cherie. Today’s action by the NCUA Board will make the examination and supervision of federally insured, state-charterd credit unions in Oregon more efficient in that one regulator — instead of two — will examine for compliance with member business lending rules. Our determination today also demonstrates how federal and state regulators can work together as partners.

Once again, I support the determination that the Oregon MBL Rule at least covers all the provisions and is no less restrictive than the NCUA regulations. That concludes my remarks. I now recognize Vice Chairman Hauptman.