WASHINGTON—The Small Business Administration (SBA) finalized its rule to streamline and modernize its Certified Development Company (CDC) program corporate governance requirements.
NAFCU said it supports the changes, saying the rule will bolster credit unions' 504 lending to members.
Financing for 504 loans is provided by CDCs, along with third-party lenders and the borrower. Although credit unions are not classified as CDCs and are therefore not directly impacted by this rule, a majority of NAFCU member credit unions that participate in SBA lending programs offer 504 loans as third-party lenders, the trade association said.
The rule was finalized largely as proposed. By streamlining and updating the operational and organizational requirements for CDCs, NAFCU said CDCs' regulatory burdens would be reduced and allow more opportunities to focus on growth and providing financing. It goes into effect. Jan. 3, 2020.
Request for Full Funding
As Congress considers fiscal year 2020 spending bills, NAFCU emphasized that it has urged lawmakers to fully fund programs used by credit unions, including the SBA's 7(a) and 504 loan programs.
In addition, the NCUA and SBA have launched a three-year collaboration to provide webinars, training events, and media outreach to increase credit unions' understanding and usage of SBA-backed loans and resources. The agencies held two webinars this year as part of this initiative.