CUNA Pushes for Improvements in Government-Guaranteed Lending

WASHINGTON – CUNA encourages Congress to improve credit unions’ ability to offer Small Business Administration (SBA) 7(a) loans, as well as other government guaranteed loans, CUNA President/CEO Jim Nussle wrote to leadership of a U.S. House Small Business subcommittee Thursday. SBA 7(a) and other government-guaranteed loans are important to credit unions because the guaranteed portions of the loan do not count against the member business lending cap.

“Congress should exempt government guaranteed loans in their entirety from the credit union member business lending cap; currently, only the guaranteed portion of the loan is exempt,” Nussle wrote to Reps. Trent Kelly (R-Miss.) and Alma Adams (D-N.C.), chair and ranking member of the U.S. House Small Business subcommittee on investigations, oversight and regulations.

Nussle also noted a few ways the SBA could make small business loans easier to make, for both the lender and borrower.

“Unfortunately, the loans are complicated to make and the costs of these loans are more expensive than conventional loans for both the lender and borrower. Specialized staffing is also necessary for credit unions to participate in SBA lending,” Nussle wrote. “We encourage the SBA to simplify and clarify the language of its regulations, eliminate inconsistencies and conflicts that make rules more complex and confusing, allow electronic submission of standardized forms, and incorporate industry consensus standards into regulations as appropriate.

These changes will allow credit unions to tap their considerable potential for increased SBA lending,” Nussle added.

At the end of 2016, there were 400 credit union SBA lenders collectively they reporting $1.6 billion in SBA loans outstanding in 8,134 individual loans.

The NJCUL hosted a series of regional meetings last year for the SBA and credit unions to better orient the industry with the resources available to increase member business lending capacity. 

The average SBA loan size is roughly $197,000.

in Industry News