America’s Credit Unions President/CEO Jim Nussle wrote to Sen. Tim Scott, R-S.C., to express the organization’s support for the Protecting Access to Credit for Small Businesses Act. The bill aims to prevent the Small Business Administration (SBA) from making direct loans through the 7(a) program.
Nussle noted the (7)a program “epitomizes a successful public-private partnership, and it’s one that leverages private sector expertise.” He added that the SBA does not act as a direct lender, but instead the administration guarantees loans made by credit unions or other lenders. He explained the SBA would drive up the cost of the 7(a) and harm financial institutions’ relationships with local small businesses.
“As such, we strongly support your legislation that would prohibit the SBA from directly making loans under the 7(a) loan program. Establishing and retaining a relationship with a credit union is the best way for a small business entrepreneur to partner with a provider of essential financial services,” wrote Nussle.
The government-guaranteed portion of loans made through the 7(a) program do not count against the member business lending cap of 12.25% of assets.
America’s Credit Unions will continue advocating for the credit union industry and advancing industry priorities.
