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January 16, 2018

NAFCU rep testifies on CUs' value to small biz

NAFCU representative Sonya McDonald will testify today before the House Small Business Committee on how to strengthen the Small Business Administration's (SBA) 7(a) loan program and the value credit unions provide to the nation's small businesses.

Today's hearing, "Strengthening SBA's 7(a) Loan Program," is set to begin at 11 a.m. Eastern. Being discussed is the Small Business 7(a) Lending Oversight Reform Act (H.R. 4743) and how the proposed legislation could strengthen oversight and integrity of the program.

McDonald, executive vice president and chief lending officer at Randolph-Brooks Federal Credit Union, will outline NAFCU's support of the bill, including provisions to better define of the Credit Elsewhere Test and to give the SBA administrator the ability to increase the budget amount to 115 percent of the limit. McDonald will also recommend the bill be revised to improve the definitions for penalties.

In her testimony, McDonald will share her credit union's participation in the SBA's loan programs. She will note that Randolph-Brooks FCU has been the No. 1 SBA lending credit union in its 55-county SBA district the past two years.

"From start-up franchises, to business acquisitions, to purchasing owner-occupied real estate, RBFCU has provided SBA loans for as little as $15,000 and as much as $3,000,000," McDonald's testimony states. "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."

McDonald will also highlight for the committee NAFCU's on-going partnership with the SBA to increase credit unions' participation in SBA loan programs across the country. "Credit unions, with their not-for-profit mission based focus, are positioned to fill the gaps of capital for small businesses, especially for underserved borrowers," she will note.

In order to improve the SBA's loan programs, McDonald will recommend the committee support legislation to remove the arbitrary cap on credit union member business lending (MBL). Each credit union loan dollar backed by SBA is currently excluded from the credit union's MBL cap, but not non-guaranteed portions.

Representatives from the Independent Community Bankers of America, American Bankers Association and National Association of Government Guaranteed Lenders will also testify at today's hearing.