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NAFCU offers support for legislation to prohibit SBA from gaining direct lending capabilities
NAFCU Vice President of Legislative Affairs Brad Thaler Friday wrote to Rep. Blaine Luetkemeyer, R-Mo., to offer support for the IMPROVE the SBA Act, introduced by Luetkemeyer last week. The legislation would reform the Small Business Administration (SBA) and prohibit the agency from engaging in any direct lending programs – a topic NAFCU has fiercely advocated against.
"Using the proven model of public-private partnerships with SBA programs is a commonsense approach to ensuring SBA funds are properly used to target the communities they are intended to help," wrote Thaler. "Any incursion into direct lending by the SBA comes with peril given the Federal government’s track record of fraud and failure in past direct lending.
“Credit unions appreciate the opportunity to partner with the SBA and offer SBA products to their members,” Thaler added. “We look forward to working with you on this legislation to ensure it continues that relationship.”
In addition, NAFCU President and CEO Dan Berger thanked Luetkemeyer for the introduction of the legislation.
"NAFCU commends Ranking Member Luetkemeyer for recognizing the need for common-sense reform at the Small Business Administration and his leadership in introducing the IMPROVE the SBA Act," said NAFCU President and CEO Dan Berger. "It is critical we shift the SBA back to its core mission, and NAFCU supports efforts in the legislation to prohibit the Administration from engaging in additional direct lending that could hurt existing small business-lender relationships -- a win for credit unions that have continued to serve their members and have never lost sight of their community’s job creators."
Last week, SBA Administrator Isabella Casillas Guzman testified before the House Small Business Committee and the Senate Small Business and Entrepreneurship Committee regarding the Administration’s budget proposal and oversight of the agency. Ahead of both hearings, Thaler reiterated the association's concerns about efforts to grant the SBA additional direct lending authority.
Thaler noted that NAFCU and its credit union members wholeheartedly recognize and support the need to expand access to small-dollar business loans and have done their due diligence to increase the number of SBA lending partners, despite statutory limitations imposed on credit union’s ability to provide small business loans.
Of note, the White House held a NAFCU-attended briefing Friday where administration representatives detailed a new report titled “The Small Business Boom Under the Biden-Harris Administration.” The report discusses new efforts made to improve the SBA’s traditional loan programs as well as strengthen community development financial institutions (CDFIs) by “investing capital and deepening partnerships.”
NAFCU will remain engaged with the SBA and Congressional leaders to halt further action on the direct lending proposal and will monitor movement related to the IMPROVE the SBA Act.