Expanding Access to Lending Options Act
Summary
The "Expanding Access to Lending Options Act" aims to amend Section 107(5) of the Federal Credit Union Act. It seeks to provide the National Credit Union Administration (NCUA) Board with the flexibility to increase the loan maturities of Federal credit unions. The bill allows for loan terms of up to 20 years, as regulated by the NCUA Board.
Expected Effects
The primary effect of this bill would be to grant the NCUA Board the authority to extend the maximum loan maturity for federal credit unions. This could potentially lead to increased access to credit for consumers. It may also stimulate economic activity through increased lending.
Potential Benefits
- Increased access to credit for consumers, particularly for larger purchases.
- Potential stimulation of economic activity through increased lending.
- Greater flexibility for credit unions to compete with other financial institutions.
- Possible reduction in the cost of borrowing due to longer repayment periods.
- Empowerment of the NCUA Board to adapt lending practices to current economic conditions.
Most Benefited Areas:
Potential Disadvantages
- Potential for increased risk of default due to longer loan terms.
- Possible higher overall interest payments for borrowers over the life of the loan.
- Risk of credit unions overextending themselves with longer-term loans.
- May lead to increased regulatory burden on credit unions to manage longer loan portfolios.
- Could incentivize consumers to take on more debt than they can reasonably manage.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution, as it aims to promote economic activity and provide access to credit. Article 1, Section 8 grants Congress the power to regulate commerce and establish credit regulations. The bill delegates some of this authority to the NCUA Board, which is a common practice in financial regulation.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).