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ALEXANDRIA, Va. – To the ire of some community bankers, credit unions continued to serve untapped niches within their membership through member business lending, including SBA loans, and other business services. As of Sept. 30, 1,612 credit unions had at least one member business loan on the books, according to Callahan & Associates, Inc. Compared to 2003, 1,601 credit unions had member business loans on the books. Since the SBA opened up its doors to credit unions in February 2003, credit unions slowly started to take advantage of the invitation. In 2003, 121 credit unions offered SBA loans compared to 181 in 2004, according to the SBA. In 2003, 121 credit unions offered SBA 7(a) loans compared to 181 in 2004, according to the SBA. The number of loans approved by SBA jumped considerably – 298 in 2003 to 752 in 2004. NCUA certainly made it easier for credit unions to offer MBLs and SBA loans. The regulator aligned its member business lending rules to be more in sync with the SBA’s rules. Still, the SBA had to shut down its 7(a) loan program for a week in January after it ran out of funds. The popular program recently moved to a zero subsidy model after raising fees for borrowers and lenders to be able to do so. CUNA has expressed some concern about the long-term impact of the zero subsidy while credit unions have mixed opinions about the whether having the ability to offer 7(a) loans outweighs the fee increases. Nationwide, CUs planted business lending seeds. Tri-Co FCU launched its Business Lending Group, Alta One CU and Redstone FCU closed their first SBA loans this year, Boeing Wichita Credit Union began offering SBA loans; as did Kennedy Space Center FCU, Ent FCU, Mission FCU, Sharon CU, and Stanford FCU. CU Business Group which, is owned by eight corporate credit unions, passed the $100 million mark for business loans in 2004. Riverside County’s CU, Fort Belvoir FCU, Redwood CU, and NASA FCU launched business services this year as did Boeing Employees CU and USA FCU. Alliance Credit Union recently became the first credit union in Missouri to be approved as an SBA lender. Several multiple, credit-union owned business lending CUSOs also sprang up this year. MBL Services LLC, owned by five credit unions and one corporate, will serve the New England area. The Cypress Group LLC, a Florida CUSO, was launched by seven credit unions and Michigan Business Connection made its official debut through its five credit union owners. Member Business Lending, LLC, affiliated with Mountain American CU, serves several credit unions in Utah. In September, Business Partners, LLC surpassed the $1 billion mark in member business loans serviced, nine years after the CUSO launched in 1995. Originally formed as Telesis Partnerships, LLC, it is owned by 14 credit unions. Spokane Teachers CU certainly made its mark when it provided $4.37 million in financing for the restoration of a historic building in the area. As with it trust services program, Navy FCU also launched business services in ’04 through its Navy Federal Small Business Services program. Eastern Financial Florida FCU launched business services and generated $2 million in business loans in its first month. Coastway Credit Union became the first credit union to become a member of the Business Development Company of Rhode Island, a state-chartered provider of secondary financing that ses its capital to extend loans to Rhode Island businesses which need supplementary financing they otherwise may not be able to obtain. Caryl Stewart, president of the Vermont Development CU, was named the state’s 2004 Financial Services Advocate of the Year by the SBA for its work with small businesses. Members Own FCU was among those recognized as `Victory Valley Small Business of the Year’ for keeping businesses from leaving California. A handful of states including Connecticut, Kentucky, Missouri, Rhode Island, South Carolina, South Dakota, and Wisconsin signed legislation that gives small business owners more of a say on how proposed regulations from state agencies will impact their operations. [email protected]

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