America’s Credit Unions President/CEO Jim Nussle this week wrote to the Senate and House Small Business Committees to voice concerns about granting the Small Business Administration (SBA) new direct lending abilities. Both Committees held oversight hearings with SBA Administrator Isabel Guzman on Wednesday.
“Direct lending by the SBA would drive up program costs and disincentivize 7(a) authorization within financial institutions, draining the value of the public-private partnership,” wrote Nussle. “Further, by becoming a direct lender to small businesses, the SBA is likely to harm local financial institutions’ relationships with small businesses and possibly hamper these businesses from establishing important banking relationships that can only help their business survive and flourish by meeting all of their financial service’s needs.”
Nussle highlighted credit unions’ commitment to providing credit to small businesses across the nation, regardless of size. “Over the past eight years, the percentage of small business loans made by credit unions has far outpaced other lenders,” he wrote.
In addition, he offered support for the Member Business Loan Expansion Act, which would make it easier for credit unions to offer loans under $100,000 by ensuring these loans do not count toward the arbitrary credit union member business lending cap.
America’s Credit Unions supports legislation from Sen. Tim Scott, R-S.C., that would prohibit the SBA from becoming a direct lender.
America’s Credit Unions will remain engaged with lawmakers to ensure credit unions can effectively meet the needs of their more than 140 million members.
