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The Small Business Administration (SBA) finalized its rule to streamline and modernize its Certified Development Company (CDC) program corporate governance requirements. NAFCU offered its support for the changes, highlighting that the rule would 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 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.

NAFCU works closely with the SBA to expand access to credit union small-dollar loans for small businesses across the nation. NAFCU and the SBA in September signed a new Strategic Alliance Memorandum (SAM) to strengthen their partnership. The association's September-October edition of The NAFCU Journal also includes a feature on SBA loan programs and how credit unions have seen success by participating in them.

As Congress considers fiscal year 2020 spending bills, NAFCU has urged lawmakers to fully fund programs used by credit unions, including the SBA's 7(a) and 504 loan programs. NAFCU also testified before a House Small Business subcommittee earlier this year to share concerns about increased fees for SBA's 7(a) loans, which were addressed in a short-term spending bill passed in September.

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.