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WASHINGTON-President and CEO of Dupaco Community Credit Union Bob Hoefer, a member of CUNA’s Business Services Committee, testified before a House Small Business subcommittee as to credit unions’ perspective on small business lending. “Credit unions have a unique role to play in serving the needs of small businesses,” Hoefer told the House Small Business Committee’s Subcommittee on Regulatory Reform and Oversight. He noted statistics from Treasury’s study of credit union business lending from January 2001, which showed that credit union business lending is more highly regulated than other traditional lenders and they have lower delinquency and charge-off rates. “That is because credit unions develop a member relationship with the borrower and are often willing to work with the small business borrowers to address problems before drastic action is necessary,” Hoefer said. He explained that the regulatory restrictions on credit union member business lending inhibit many from getting involved at all. “For a number of credit unions, it does not take many loans before they have reached the 12.25% limitation. Thus, many feel it is simply not worthwhile to develop or acquire member business lending expertise necessary to make member business loans,” the CEO said. Hoefer also told the subcommittee that NCUA is doing its part to relieve credit unions from regulatory burden, noting Vice Chair JoAnn Johnson’s highly anticipated proposal to come out this spring. The Small Business Administration recently opened its 7(a) loan program to all credit unions, rather than just geographically-based ones, which helps credit unions better manage risk and expand business lending programs. Shortly following the SBA’s announcement, CUNA offered its own initiative to facilitate member business lending and participation in SBA-backed lending, Hoefer pointed out. “Partnering with several nationwide, highly respected business alliances, credit unions are able to choose from a range of operations options ranging from consulting to help credit unions achieve SBA approval for their own programs to off-site turnkey services that provide comprehensive support for member business lending,” he said. “Working with seasoned, former SBA officials, CUNA believes this program will fill a need within the credit union system that will not only support lending operations but also provide a range of educational and training programs to enlighten and inform credit unions about the benefits of reaching out to small businesses within their communities.” CUNA was one of 15 groups to be invited to the hearing and the only financial services organization. [email protected]


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