House passes credit union-backed bill to limit SBLCs

The House passed an America’s Credit Union-backed bill to limit to cap the number of Small Business Lending Companies (SBLC) licenses awarded by the Small Business Administration Thursday with a 214-198 vote.

“We thank the House for advancing this much-needed legislation, which limits participation in SBA programs while ensuring regulated entities such as credit unions remain a critical part of SBA’s mission to aid small businesses,” said America’s Credit Unions President/CEO Jim Nussle. “Increased numbers of SBLCs threaten to undermine SBA loan performance and loan integrity, and this legislation ensures a proper limitation on their involvement.”

America’s Credit Unions wrote to House leaders Thursday urging their support for the legislation, which codifies the cap to the 16 existing SBLCs, and restores oversight capabilities to the SBA. Its letter also encouraged the SBA to consider awarding SBLC licenses to credit union service organizations (CUSOs), as their investments are already regulated, capped and monitored under the Federal Credit Union Act, unlike most non-bank fintech lenders.