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NAFCU expresses concerns with SBA rules to House Small Biz Committee
NAFCU Vice President of Legislative Affairs Brad Thaler wrote to the House Small Business Committee Tuesday ahead of its hearing to examine the Small Business Administration’s (SBA) 7(a) lending program.
Thaler remarked that NAFCU remains “concerned that two recent actions by the SBA may end up running counter to these efforts by opening the programs to unregulated competition.”
The SBA in April issued two final rules. The first changed regulations governing its 7(a) and 504 loan programs related to lending criteria, loan conditions, affiliation standards, and more. The other 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.”
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 previously asked the agency to pause both rulemakings to allow for a better understanding of the rules' separate and collective impacts. NAFCU will monitor today’s hearing and continue to advocate to ensure the safety and soundness of credit unions’ ability to provide access to capital for Main Street small businesses.