WASHINGTON -- Greylock Federal Credit Union Senior Vice President of Business Banking Don Kuczarski told the House Small Business Committee that restoring SBA funding was important to credit unions' business offerings.
Testifying on behalf of CUNA, Kuczarski acknowledged Committee Chairwoman Nydia Vel??zquez's (D-N.Y.) introduction of the Credit Union Small Business Lending Act (H.R. 1849) and her support of credit union participation in SBA's programs. He explained that Greylock has helped turnaround the economy of Western Massachusetts by focusing on business loans between $10,000 and $200,000.
"Many of these loans, due to their higher risk profile, would not have been made without the assistance of the SBA," he told the committee. Greylock has been offering SBA 7(a) loans since 2001 and in 2006 was named to the Preferred Lender Program, which is a real time saver by skipping regional office submission. However, increased fees and lowered funding has made participation in the program less appealing for lenders and borrowers.
He also made a pitch for the member business lending provisions in the Credit Union Regulatory Improvements Act (H.R. 1537), which would boost credit unions' cap on business loans from 12.25% of assets to 20%.
NAFCU also wrote a letter to the committee on Sept. 27, the day of the hearing. "Many small business owners are members of credit unions around the country and rely on our services to help make their small businesses a success," NAFCU Senior Vice President of Government Affairs Dan Berger wrote. "However, recent increases in borrower and lender fees with these loans have made these loans a less attractive option for credit unions." He noted small business' contributions to the U.S. economy.
Berger added, "Furthermore, many federal credit unions are discouraged from taking part in these helpful programs due to current burdens of qualifying as an SBA lender and the challenges of underwriting and servicing loans. NAFCU strongly supports H.R. 1849, the Credit Union Small Business Lending Act, which you introduced on March 29th, 2007, that would help address these concerns. In addition to supporting your efforts for increased funding for these SBA programs, we also urge the Committee to take up and pass this important legislation."