SBA lending programs should reduce barriers to credit union participation
Streamlining processes and providing targeted training and technical assistance would reduce barriers to credit union participation in Small Business Administration (SBA) lending programs, wrote America’s Credit Unions President/CEO Jim Nussle in a letter sent ahead of Tuesday's Senate Appropriations Subcommittee on Financial Services and General Government hearing where SBA Administrator Kelly Loeffler testified.
The letter outlined changes that would help credit unions provide needed assistance to small businesses.
“One of the most pressing challenges facing credit unions in expanding their role in SBA programs is the complexity of program requirements,” wrote Nussle. “While credit unions are eager to grow their SBA loan portfolios, many report that the administrative burden, lack of internal expertise, and high costs associated with participation remain significant barriers.”
He explained that streamlining the SBA loan processes would be “a game-changer for credit unions and the small businesses they serve.”
The letter also outlined the need for the SBA to adopt stringent safeguards for fintech participation in its programs. He detailed opposition to direct lending initiatives and said the SBA should instead strengthen its partnerships with community-based lenders, like credit unions.
“Credit unions are ready and willing to provide the capital to help small businesses grow. Improving access for the SBA’s credit union lending partners will help limit long term risk and ultimately benefit SBA lending programs,” Nussle concluded. “We call on Congress to ensure that the SBA has the full funding to support such programs and to ensure that credit unions have the right regulatory environment to partner with the Administration.”