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<p>WASHINGTON-NAFCU officials met last week with Small Business Administration (SBA) Director Hector Barreto to discuss federal credit unions’ options for participating in SBA-backed loans. Currently only community-based credit unions are approved to provide SBA loans because there has been some concern by the agency in the past that credit unions do not serve the general public. NAFCU argued that credit unions are restricted by statute from serving the general public and that it is not a choice based on discriminatory practices. The lobby group also pointed out that credit unions participate in every other type of federal loan program, such as Sallie Mae and others. NAFCU also noted SBA’s own legal opinion letter from 1975, stating that credit unions should be treated as any other lender. “I think we had a good meeting.We’ve been working this issue for some time now,” NAFCU President and CEO Fred Becker commented. Also attending the meeting were NAFCU Senior Vice President and General Counsel Bill Donovan and Associate Director of Legislative Affairs Kelleen Trauger. Barreto, Becker said, made no promises other than “to take a hard look” at the issue. He said the director emphasized that the SBA was not afraid of making policy shifts, particularly with the new administration, but that he wanted his staff to have ample time to look into the situation. NAFCU was asked to help the SBA with details concerning the credit unions’ position and the state of the credit union community. Barreto was appointed just six months ago. Later the same day, NAFCU also met with Treasury Assistant Secretary Sheila Bair to provide information regarding the state of the credit union. NAFCU noted that the number of credit unions has been declining for some time, while the number of federal credit unions is falling even further. The trade association also discussed the NCUA’s regulatory relief proposals, which were forwarded to House Financial Services Committee Chairman Mike Oxley and fully supported by NAFCU. NAFCU gave several legislative fixes that it felt would help slow credit unions’ declining numbers, including clarifying the voluntary merger authority; allowing credit unions that convert to a different charter to continue to serve old select employee groups (SEGs); eliminating `local’ from the definition of community; eliminating the preference for larger groups to form a new credit union; and relaxing member business loan restrictions, among other things. Becker reported that Bair appeared to be unaware of the declining numbers of credit unions and federal credit unions. He described her reaction as disconcerted.</p>

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