Episode 18: Main street lending

The cap does not apply to TrueLine, but because you're a CDFI institution.

Let me take this question and throw it at you.

What happened if you did have to comply with that cap? What would you have to do and unwind? How would that affect your credit union's ability to serve its members?

So for us, it's the low-income designated, not the CDFI.

Oh, I'm

sorry.

But

they kind of work hand-in-hand.

CDFI has it as well, but we're leveraging the low-income designation.

That was taken away.

If that were taken away from us because we grew in a different way from a membership base, we would have to come back down to that cap.

But we're not taking advantage of it to where we're blowing our balance sheet up to make it where your 50, 60 percent of your portfolio is nothing but commercial loans and you're acting like a commercial bank.

We're doing it in such a way that we're keeping ourselves kind of close to the cap.

So if something ever happened, it wouldn't be very hard for us to move back in line.

And the NCUA would give us five years to get back in line.

But I think it's important and I wish the NCUA would raise the cap.

You know, if you need to keep a cap in place, keep it.

But 12.5% is not enough in some instances in some of these markets that we serve where the bigger banks have pulled out and aren't willing to lend to those communities.

We really can be a Main Street lender as credit unions.

And I think we've got to find a way to do that across the board, not just with consumer, but also the commercial side of things.

You know, Anderson, it is interesting.

What's your cap on credit cards? For a portfolio? No, but I'm just saying like, what's your regulatory cap for credit cards? There's

not one, right?

Right.

How about used car loans? How about mortgage? That is interesting.