Board Perspectives
MEMBER BUSINESS LOAN WAIVERS AVAILABLE
BY GIGI HYLAND, NCUA BOARD MEMBER
In a recent conversation with credit
union representatives, the issue of
blanket waivers under NCUA’s member
business loan (MBL) rule, Part 723 of
NCUA’s Rules and Regulations, arose. I
was asked whether blanket waivers for classes or type of
loans are available particularly as such waivers relate to
obtaining personal guarantees on MBLs. The short answer is
yes—personal guarantees are eligible for a blanket waiver.
see), you should also be aware that “blanket” waivers for
classes or types of loans may also be granted by RDs in
certain circumstances, including blanket waivers from the
personal guarantee requirement.
Part 723 of NCUA’s Rules and Regulations outlines
requirements, limits, and prohibited activities applicable to
federally insured credit unions (FICUs) making MBLs. FICUs
may seek regional director (RD) waivers for a variety of the
limits prescribed, including appraisal requirements, aggregate
construction and development loan limits, and loan-to-value
ratio requirements for business loans, just to name a few.
NCUA strongly believes that obtaining a personal guarantee
is a prudent business practice and solidifies the personal
commitment of the principal to the business enterprise. In
small businesses, it is standard practice for the principal to
shoulder the bulk of the risk through personally guaranteeing
the loan as they are typically in a position to personally benefit
the most from the success of the business entity. However, we
recognize that there may be instances where waiving the
personal guarantee is appropriate and does not pose undue
risk to the credit union. The agency is open to considering
those types of situations in the waiver request process.
While many credit unions understand that they can request
waivers for individual loans (the most common request we
To obtain a regular or blanket waiver, you must submit a
request along with supporting documentation to the RD.
Section 723.11 of NCUA’s member business loan rule outlines
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NCUA BUDGET TALK
BY MICHAEL E. FRYZEL, NCUA BOARD MEMBER
When I arrived at NCUA in August
2008, I was immediately confronted
with the problem existing in corporate
credit unions. Handling that situation
consumed almost the entire year I served
as Chairman.
union regulators with reduced staffs and the inability to
complete all of their examinations.
My first job in state government was to oversee millions of
dollars in state and federal funds for an agency attached to the
Governor’s Office. Being a fiscal conservative, I watched every
penny and, if possible, I did not spend everything appropriated.
However, one other significant problem came to my
attention. The lack of planning to make sure adequate
staff was available to fully examine both corporate and
natural-person credit unions. In the past, some Board
members felt that reducing the budget every year was good
fiscal management and a way to show stakeholders they were
being prudent. That meant there were some credit unions that
had not been examined for 18, 24, or even 30 months. That
was totally unacceptable. In addition, state governments had
begun to drastically cut their budgets, leaving some credit
Three years ago, NCUA was understaffed. At that time I said
we would continue to build our staff, train them properly,
and get to a level where we could examine every federally
insured credit union every 12 months. I immediately got
involved in the budget process, which was already well
underway. I initially wanted to add 100 new examiners but
moved forward with 50 due to the strain that would be
placed upon our office and staff in trying to train that many
new examiners.
CONTINUED ON PAGE 9
The NCUA Report is published by the
National Credit Union Administration,
the federal agency that supervises
and insures most credit unions.
Debbie Matz, Chairman
Christiane Gigi Hyland, Board Member
Michael E. Fryzel, Board Member
Office of Public & Congressional Affairs
Cherie Umbel, Editor
cumbel@ncua.gov
National Credit Union Administration
1775 Duke Street, Alexandria, Va. 22314-3428
