WASHINGTON—The Small Business Administration's 7(a) loan program has "enabled credit unions to help entrepreneurs who would otherwise be unable to find funding," NAFCU told leaders of the House Small Business Committee ahead of a hearing Wednesday on the program.
NAFCU Vice President of Legislative Affairs Brad Thaler, in a letter to House Small Business Committee Chairman Steve Chabot (R-OH) and Ranking Member Nydia Velázquez (D-NY), said that one way Congress could help improve the 7(a) loan program would be to reintroduce the "Credit Union Small Business Lending Act."
This bill was introduced in the 110th Congress by Velázquez and would amend the Federal Credit Union Act to exclude any SBA loan (guaranteed and nonguaranteed portions) from the meaning of "member business loan" of a credit union.
Thaler also wrote that "issuing, improving, and adhering to guidance or published 'best practices' would go a long way in helping credit unions get more involved in SBA lending programs."
"If Congress and the SBA were to make it easier for credit unions to participate in these programs, small businesses throughout the nation would have greater access to capital at a time when it is greatly needed," Thaler added. "We urge Congress and the SBA to take the necessary steps to enhance credit union participation in the 7(a) program."
In March, NAFCU witness Sonya McDonald, executive vice president and chief lending officer at Randolph-Brooks Federal Credit Union, testified before a House Small Business subcommittee on the SBA's 7(a) loan program. She noted that further participation in the SBA's 7(a) loan program would allow more credit unions to offer these kinds of loans and increase the number of small businesses in their communities.
In 2015, NAFCU signed a three-year memorandum of understanding with the SBA aimed at getting more credit unions to increase their lending to member small businesses through SBA micro loan programs.