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Randolph-Brooks Federal Credit Union's Sonya McDonald will testify today on behalf of NAFCU before a House Small Business subcommittee on the Small Business Administration's 7(a) loan program and the value credit unions provide to the nation's small businesses.

Today's hearing, "An Overview of SBA's 7(a) Loan Program," held by the Subcommittee on Investigations, Oversight and Regulations, begins at 11 a.m. Eastern. The hearing will also include testimony from representatives of the Independent Community Bankers of America and the National Association of Government Guaranteed Lenders.

McDonald, executive vice president and chief lending officer at Randolph-Brooks Federal Credit Union, will discuss her credit union's participation in the SBA's loan programs. "In 2016, RBFCU was the No. 1 SBA lending credit union in our 55-county SBA district," she says. She says the credit union has provided SBA loans for as little as $15,000 to as much as $3 million.

"SBA products allow us to leverage our lending dollars, mitigate the risk associated with the loans, and extend more credit to our communities' small businesses," she says.

She will also discuss the three-year memorandum of understanding that NAFCU signed with the SBA in 2015 aimed at getting more credit unions to increase their lending to member small businesses through SBA micro loan programs.

McDonald will also hit on some of the challenges credit unions face in lending to their small-business members, such as the arbitrary member business lending cap. Credit unions are limited on their member business lending to the lesser of either 1.75 times their net worth or 12.25 percent of total assets. Government-guaranteed portions of SBA loans do not count toward credit unions' member business lending cap, but the non-guaranteed portions do.

She also points to a 2011 SBA study that found credit union business lending grew as a percentage of credit union assets both before and during the financial crisis; during the same period, banks' small-business lending decreased. She will urge the subcommittee to support legislation to remove the arbitrary cap on credit union member business lending.

McDonald also will share with the subcommittee ways to improve SBA's 7(a) loan program, including the reintroduction of the "Credit Union Small Business Lending Act," which would amend the Federal Credit Union Act to exclude any SBA loan (guaranteed and non-guaranteed portions) from the meaning of "member business loan" of a credit union.

She will also recommend ways the SBA can improve its loan programs to help credit unions.