Financial regulators including the NCUA released a statement today reassuring their regulated institutions that prudently made small business loans would not face "regulatory criticism."
"The statement emphasizes that financial institutions that engage in prudent small business lending after performing a comprehensive review of a borrower's financial condition will not be subject to supervisory criticism for small business loans made on that basis. Financial institutions should understand the long-term viability of the borrower's business and focus on the strength of a borrower's business plan to manage risk rather than using portfolio management models that rely primarily on general inputs, such as a borrower's geographic location or industry," the regulators said in their statement.
"The regulators are working with the industry and supervisory staff to ensure that supervisory policies and actions do not inadvertently curtail the availability of credit to sound small business borrowers," the statement read.
