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Ahead of Wednesday's Senate Small Business Committee markup of the Community Advantage Loan Program Act, NAFCU, CUNA and four other financial lobbying groups filed a joint letter supporting the committee's efforts to use the legislation to help possibly offset the negative impacts from recent final rules issued by the U.S. Small Business Administration (SBA).
The final rules issued by the SBA in April, which went into effect on May 11, changed the regulations surrounding the SBA's 7(a) and 504 loan programs as it relates to loan conditions and lending criteria, as well as expanding the ranks of SBA lenders by increasing the number of Small Business Lending Company (SBLC) licenses.
The letter, signed by CUNA, NAFCU, the American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America and National Association of Government Guaranteed Lenders stated, "We support the mission of the 7(a) program to encourage lenders to provide loans to underserved small businesses. We remain concerned that SBA's decision to lift the moratorium on the number of non-Federally regulated lenders in the 7(a) program while simultaneously loosening underwriting standards may negatively impact the performance of 7(a) loans, threaten the integrity of the program, and lead to increased borrower and lender fees.
"Collectively, we support the efforts of the Committee to bring the legislation to this point, as well as support moving the process forward in the Committee so that we may continue the dialogue on these important issues. Our trade associations look forward to working with Congress through the legislative process, and we will continue to give voice to the lending industry's concerns regarding how best to maintain 7(a) loan program integrity," the letter stated.
According to the group statement, the organizations support advancing the Community Advantage Loan Program Act as a legislative response to the SBA's final rulemaking. The legislation the Senate Committee will discuss could achieve the following:
- Provide permanency to the piloted Community Advantage program.
- Cap the number of SBLCs.
- Provide additional guardrails and authority for the Office of Credit Risk Management at SBA to enhance oversight of non-federally regulated 7(a) lenders for which SBA serves as the primary regulator.
- Reinstate the SBA Franchise Directory.
- Reinstate the loan authorization.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
