The Defense Credit Union Council (DCUC) commends the introduction of the Expanding Access to Lending Options Act in the U.S. Senate, a bipartisan effort led by Senator Kevin Cramer (R-ND) and Senator Catherine Cortez Masto (D-NV) to empower federal credit unions with greater lending flexibility.
The Senate bill, a companion to H.R. 4167 in the House, would authorize the National Credit Union Administration (NCUA) to raise the general loan maturity cap from 15 years to 20 years and permit credit unions to offer 30-year loans for one-to-four unit residential properties (including non-owner-occupied homes). This modernization would ultimately lower monthly payment burdens and expand access to affordable credit for families, small businesses, and servicemembers.
“DCUC and our member credit unions strongly support this common-sense, long-overdue modernization,” said Anthony Hernandez, DCUC President/CEO. “For decades, federal law has capped most credit union loans at 15 years, an outdated restriction that hasn’t changed in decades and no longer reflects today’s financial realities. By lifting this arbitrary 15-year cap and allowing maturities up to 20 years or more, Congress is giving credit unions the flexibility to better serve their 144 million members nationwide. This bill aligns credit union lending with common market practices and empowers us to fully meet our members’ needs, from homeownership to business expansion, with loan terms that make sense for them.”
Key Provisions & Goals of the Expanding Access to Lending Options Act:
- Increased Loan Maturities: Empowers the NCUA to increase the general loan maturity limit for federal credit unions from 15 years to 20 years, updating a cap that has remained unchanged for decades.
- Longer Mortgage Terms: Allows credit unions to offer 30-year maturities on loans secured by 1- to 4-unit residences, including both principal residences and non-primary homes. Credit union members could obtain long-term financing for second homes or investment properties through their credit union, an option often unavailable under current law.
- Lower Monthly Payments: By extending loan terms, credit unions can provide borrowers with smaller, more affordable monthly payments. For example, repaying a loan over 20 years instead of 15 years can significantly reduce a borrower’s monthly payment burden, helping families manage budgets and making large purchases (i.e., homes, vehicles, or education expenses) more attainable.
- Greater Flexibility & Competitiveness: Modernizes federal credit union lending rules to align with those of other lenders, removing antiquated constraints. Credit unions will be better equipped to offer competitive long-term loan products, leveling the playing field with banks and other financial institutions.
- Broader Access to Credit: Expanding maturities benefits a wide range of Americans, enabling credit unions to better serve families, small businesses, students, and military servicemembers with financing options tailored to their needs. By increasing access to affordable credit, the bill supports community economic growth and financial well-being for underserved populations.
“By allowing longer-term loans, this bill will directly benefit consumers with more affordable financing options,” Hernandez added. “Extended terms mean credit unions can offer lower monthly payments to borrowers. That can be life-changing for a family on a tight budget or a small business owner looking to grow, a loan repaid over 20 or 30 years can significantly ease a borrower’s monthly cash flow. At a time of economic uncertainty, giving people the option of longer repayment periods provides much-needed financial relief.”
Hernandez also noted the unique impact on military families and veterans. Under current law, federal credit unions can typically only offer 30-year mortgages for a member’s primary residence, preventing many servicemembers from using their credit union to finance other homes.
“Servicemembers frequently relocate and often can’t obtain long-term financing from their credit union for a future retirement home unless it’s their primary residence,” Hernandez explained, referencing the limitation in current statute. “This bill changes that. By permitting 30-year loans on non-primary residences, it gives military members and veterans the chance to buy a home where they plan to live after service, even if they’re stationed elsewhere. In short, the legislation gives all credit union members – including those who serve our nation, more flexible and affordable borrowing options to improve their financial well-being.”
Why It Matters
- Updating Outdated Limits: The 15-year loan term cap for federal credit unions dates back to an era with very different economic conditions. Removing this outdated limit “updates an antiquated restriction”, as DCUC noted in House testimony, and brings credit union regulations in line with the 21st century financial marketplace.
- Economic Relief in Uncertain Times: Allowing longer loan terms provides immediate relief to consumers by lowering monthly payments, which helps Americans manage debt during times of economic uncertainty. This flexibility can stabilize family finances during crises and downturns, acting as a form of economic relief.
- Level Playing Field: Today, banks and other lenders can offer 30-year mortgages and long-term loans, while federal credit unions are hindered by law from doing the same. This bill levels the playing field, strengthening credit unions’ ability to compete and serve their communities with comparable products. A stronger credit union sector means more consumer choice and competition in the financial services market.
- Empowering Communities: Credit unions are not-for-profit cooperatives that exist to serve member needs, including many military families, low-income households, and underserved communities. By expanding credit unions’ lending toolbox, the Act helps these institutions do more of what they do best – provide safe, affordable credit and personal financial guidance to those who might not find it elsewhere. Ultimately, this legislation supports local economies by enabling credit unions to finance more homes, education, and small-business ventures in their communities.
“We applaud Senators Cramer and Cortez Masto, and their colleagues, for advancing this bipartisan solution,” Hernandez says. “Strengthening credit unions’ lending capacity will help countless Americans, from the young family buying a first home to the veteran entrepreneur starting a business, achieve their financial goals. Congress should move quickly on this bill. By modernizing regulations, we can ensure every American has access to safe, affordable credit and empower credit unions to continue putting members’ interests first.”