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NAFCU Senior Regulatory Affairs Counsel Michael Emancipator, in a letter sent to the Small Business Administration (SBA) Wednesday, outlined ways in which the agency can reduce its regulatory burden and help credit unions better serve their business members.

"Instead of using their limited resources to comply with obsolete, unnecessary, ineffective, or burdensome regulations, credit unions would much rather allocate those resources toward providing small business owners with access to capital," Emancipator wrote. "Credit unions are eager to serve the financial needs of their small business-owner members, especially when other financial institutions are not willing or able."

In order to reduce regulatory burdens and increase the number of credit unions offering SBA products, Emancipator recommended that the SBA:

• support legislation that would remove the arbitrary member business loans (MBL) cap of 12.25 percent in order to allow credit unions to serve more small business owners;
• support the reintroduction of the Credit Union Small Business Lending Act, which would exclude any SBA loan from the MBL cap;
• publish a best practices or case study for credit unions to emulate when establishing an SBA program and clarify compliance guidance with SBA regulations and procedures;
• reexamine the Community Advantage pilot program, which is intended to meet the credit, management and technical assistance needs of small businesses in underserved markets, and consider allowing credit unions to participate; and
• streamline the SBA loan approval process, which can take up to eight weeks or more, in order to decrease approval times so small business owners have access to the credit they need in a timely fashion.

Emancipator reiterated that "credit unions are committed to serving the financial needs of small businesses" and thanked the SBA for its efforts to improve regulations to make it easier for small businesses to access capital.

The SBA's request for information is pursuant to executive orders issued by President Donald Trump to identify regulations that should be repealed, replaced or modified.

NAFCU signed a memorandum of understanding with the SBA during its annual Congressional Caucus in September with the stated goal of increasing the number of credit unions that offer SBA products and streamlining the process for credit unions that already offer such products.