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NAFCU to SBA: CDC proposal would 'bolster' CU lending
NAFCU Regulatory Affairs Counsel Kaley Schafer shared the association's support of the Small Business Administration's (SBA) proposed rulemaking to streamline and modernize its Certified Development Company (CDC) program corporate governance requirements in a letter sent Monday to the agency.
"The proposed rule will streamline and update the operational and organizational requirements for CDCs, likely bolstering 504 lending to credit union members. Reducing regulatory burdens on CDCs will allow more opportunities to focus on growth and providing financing," wrote Schafer.
CDCs provide financing for 504 loans along with third-party lenders. Although credit unions are not classified as CDCs and are therefore not directly impacted by this proposed rule, a majority of association member credit unions that participate in SBA lending programs offer 504 loans as third-party lenders.
Schafer also noted that NAFCU members report increased demand for business lending over the past year, demonstrating that a credit union member's access to affordable small business lending programs "ensures our local communities continue to thrive, promote innovation, and provide jobs."
In addition, there are a number of similarities between the credit unions and small business lending programs.
"Just as the SBA's loan programs were designed to provide lending to small businesses that might not otherwise obtain financing, credit unions were similarly designed to provide provident credit to individuals and small businesses that might not otherwise have the means to obtain it," she said.
NAFCU is active on SBA lending issues, and met with former Administrator Linda McMahon earlier this year to discuss credit unions' participation in SBA lending programs as well as website accessibility concerns under the Americans with Disabilities Act (ADA) and efforts to modernize the Telephone Consumer Protection Act (TCPA). The association looks forward to continuing to partner with the SBA to provide resources for credit unions to learn about SBA loan products.