Newsroom
House Small Business Committee Republicans voice opposition to SBA direct lending
House Small Business Committee Republicans last week sent a letter to Speaker Nancy Pelosi, D-Calif., and House Minority Leader Kevin McCarthy, R-Calif., outlining concerns regarding a proposal included in the Build Back Better Act granting the Small Business Administration (SBA) direct-lending abilities. Under the provisions, the SBA could generate and distribute 7(a) loans of $150,000 or less, directly to borrowers or “through partnerships with third parties.”
The Republicans on the Committee, led by Ranking Member Blaine Luetkemeyer, R-Mo., expressed their opposition to the proposal urging House leadership to “exercise extreme caution with any proposals that rely solely on the federal government to underwrite and disburse small business assistance.”
Luetkemeyer and the other authors of the letter also noted that “the SBA’s most successful and efficient lending programs are assisted by the participation of private sectors,” underscoring the proven success of the public-private partnership between private lenders and the SBA from the Paycheck Protection Program (PPP).
Of note, during a House Small Businesses hearing Wednesday on entrepreneurial programs, Reps., Young Kim, R-Calif., and Scott Fitzgerald, R-Wisc., both raised concerns with this proposal to SBA Associate Administrator Mark Madrid.
When Kim asked about the direct lending program, Madrid responded that the intent behind the proposal was to ensure no one was let behind in low-income areas and that capital was available to underserved communities. Kim suggested alternative programs like such as the COVID EIDL program as apposed to granting the SBA direct lending authority.
NAFCU continues to voice its concerns against the proposal, noting specifically that the provision would not require the SBA to work with lenders as they do with other 7(a) loan products, and would inherently allow them to make these new loans on their own.
Last month, NAFCU Vice President of Legislative Affairs Brad Thaler sent a letter to both the House and Senate Small Business Committees in continuation of the association’s advocacy efforts against the direct lending proposal. “Even though the SBA has authority to make direct loans now, they have not exercised this authority, with the exception of disaster loans and loans to Microloan program intermediaries, since 1998 due to the challenges associated with them, including a history of higher rates of fraud and defaults,” wrote Thaler.
“NAFCU recognizes the need for smaller loans for small businesses, and that is why we have supported legislation such as H.R. 5189, the Member Business Loan Expansion Act,” emphasized Thaler. “Allowing lenders that have relationships with small businesses, such as credit unions, to do more to help is a better approach to addressing this need.”
The association remains steadfast to ensure this provision is excluded from the budget reconciliation proposal. NAFCU will continue to engage Congress to advocate against provisions that would further complicate the direct lending process
Share This
Related Resources
Add to Calendar 2024-05-13 09:00:00 2024-05-13 09:00:00 Covering Your Assets- The Bottom Line on Tracking and Collateral Protection Listen On: Key Takeaways: [04:23] Having access to policy and claim information is vitally important so you can mitigate your risks in that area. [06:39] Members are shopping and changing their insurance more than ever before. 41% of households with car insurance shopped for coverage at least once in the last 12 months. [10:05] One of the leading indicators of a default or a repossession situation is the dropping of insurance. [12:49] The most important thing from a tracking and risk management perspective is to make sure that the borrower lists the credit union as a lienholder. Web NAFCU digital@nafcu.org America/New_York public
Covering Your Assets- The Bottom Line on Tracking and Collateral Protection
Strategy & Growth, Consumer Lending
preferred partner
Allied Solutions
Podcast
Add to Calendar 2024-05-07 14:00:00 2024-05-07 14:00:00 BSA Training for the Board of Directors This webinar, BSA Training for the Board of Directors provides vital training with a comprehensive overview of the Bank Secrecy Act (BSA), anti-money laundering (AML) and combatting the financing of terrorism (CFT) compliance requirements. You’ll explore the ramifications of non-compliance and gain insights into the expectations and requirements set forth by the National Credit Union Administration (NCUA). This includes discovering how board engagement plays a pivotal role in fostering a robust BSA/AML compliance program within your credit union. Don’t miss this opportunity to equip your board with the knowledge and insights needed to navigate the regulatory landscape effectively. Key Takeaways Identify BSA/AML compliance requirements Review board member duties as it relates to BSA/AML compliance Examine current regulatory actions that may impact your credit union Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until May 2, 2025Go to the Online Training Center to access the webinar after purchase » Who Should Attend Board members Board chairs and vice chairs Supervisory committee members Presidents/CEOs Executive assistants Education Credits NCRMs will recieve 1.0 CEUs for participating in this webinar NCCOs will recieve 1.0 CEUs for participating in this webinar NCBSOs will recieve 1.0 CEUs for participating in this webinar NCVEs will recieve 1.0 CEUs for participating in this webinar Web NAFCU digital@nafcu.org America/New_York public
BSA Training for the Board of Directors
Credits: NCCO, NCBSO, NCRM, NCVE
Webinar
Add to Calendar 2024-05-06 14:00:00 2024-05-06 14:00:00 Overview of Regulation CC Join us for this webinar, Overview of Regulation CC, and you’ll delve into the intricacies of the Expedited Funds Availability Act and Regulation CC. This includes gaining invaluable insights on effectively implementing funds availability requirements, navigating the process of placing holds on deposited items and crafting comprehensive disclosures for your members. Don't miss this opportunity to enhance your understanding of regulatory compliance in the financial landscape. Key Takeaways Know the funds availability requirements Learn what must be included in disclosures Comprehend extended holds Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until April 18, 2025Go to the Online Training Center to access the webinar after purchase » Who Should Attend NCCOs NCRMs Compliance and risk titles Education Credits NCCOs will receive 1.0 CEUs for participating in this webinar NCRMs will recieve 1.0 CEUs for participating in this webinar Web NAFCU digital@nafcu.org America/New_York public
Overview of Regulation CC
Credits: NCCO, NCRM
Webinar
Add to Calendar 2024-05-03 14:00:00 2024-05-03 14:00:00 Plan Sponsor Attitudes Toward Retirement Plan Management and Fiduciary Outsourcing About the Webinar In January 2024, Pentegra conducted a survey of retirement plan sponsors and their perspectives on retirement plan management and fiduciary outsourcing. The survey measured how sponsors are using fiduciary outsourcing to help better manage their retirement plans. It also captured their perspectives on what outsourcing does to help them better position their plans and drive improved retirement plan outcomes. Key Takeaways: What is the full scope of your responsibilities as a plan sponsor? What is fiduciary outsourcing and how does it work? How does fiduciary outsourcing help reduce workloads and minimize risk? How can a credit union best position its plan to drive improved outcomes? Register Here Web NAFCU digital@nafcu.org America/New_York public
Plan Sponsor Attitudes Toward Retirement Plan Management and Fiduciary Outsourcing
preferred partner
Pentegra
Webinar
Get daily updates.
Subscribe to NAFCU today.