WASHINGTON—Ahead of a hearing this week to examine the Small Business Administration’s (SBA) 7(a) lending program, NAFCU wrote to the House Small Business Committee noting that two recent actions by the SBA may open up the program to unregulated competition.
Specifically, the SBA in April issued two final rules, the first of which changed regulations governing its 7(a) and 504 loan programs related to lending criteria, loan conditions, affiliation standards, and more. The second amended its 7(a) loan program regulations to lift the moratorium on licensing new small business lending companies (SBLCs) and add a new type of entity, called a “Community Advantage SBLC.”
‘Susceptible to Fraud’
NAFCU Vice President of Legislative Affairs Brad Thaler noted in the letter that the rules would loosen “7(a) lending standards at the same time as opening that program to entities already proven to be more susceptible to fraud” than regulated financial institutions.
NAFCU noted it had previously asked the agency to pause both rulemakings to allow for a better understanding of the rules' separate and collective impacts.
Legislation Introduced
Separately, Reps. John Rose (R-TN) and Brittany Pettersen (D-CO) have introduced legislation to amend the Riegle Community Development and Regulatory Improvement Act. The amendment would require the Treasury Secretary or their designee to testify about Community Development Financial Institutions (CDFI) Fund before both the House Financial Services Committee and the Senate Banking Committee annually.
NAFCU Vice President of Legislative Affairs Brad Thaler wrote to Rose and Pattersen to express support for the legislation, arguing it will “help enable Congress to ensure the Fund is carrying out its intended mission to help low-income and underserved communities.”
‘Deeply Concerned’
Earlier this month, the fund released an update on where revisions to the application stand, stating it expects to begin accepting new certification applications in the fall of 2023, NAFCU noted.
“We are deeply concerned that the CDFI Fund continues to give community-based credit unions the runaround,” said NAFCU President and CEO Dan Berger in response to the update.
CUNA Names New Hill Advocate
Separately, CUNA has named David Park as its new senior director of advocacy and counsel, and will serve as the association’s subject matter expert on housing issues.
“David brings a wealth of experience and strengthens our best-in-class regulatory advocacy for credit unions. We are excited for him to hit the ground running,” said Alexander Monterrubio, deputy chief advocacy officer for regulatory affairs & managing counsel.
Park has more than a decade of experience in legal analysis and regulatory compliance, and was a senior policy and compliance officer at Navy FCU prior to joining CUNA.
Park holds a law degree from the University of Texas and a bachelor's degree from the University of California, Berkley.
He is a member of the Virginia State Bar.
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