SAN DIMAS, Calif. – California credit union officials recentlygot an earful from SBA Administrator Hector Barreto as he pluggedPresident Bush's proposals for reforming the Social Securitysystem. Barreto was the keynote speaker at a March 22 VIP receptionsponsored by WesCorp and the California Credit Union League. Inaddition to touting the President's various private retirementaccounts to aid what some have called a system on the brink ofcollapse, Barreto also encouraged credit unions here to partnerwith the SBA Express Loan Program. Historically, credit unions haveprovided predominantly personal loans to members, the league andWesCorp said. SBA officials said expanding into commercial lendingby becoming SBA-approved lenders, credit unions can increase theamount of total capital available to businesses for startup andexpansion, to include job retention and creation, and become keycontributors to real economic resurgence – especially in theSouthern California region where business loans are in high demand.The Los Angeles SBA district office has led the nation incollaborating with financial institutions in lending since themid-1990s, approving 3,000 loans for $1 billion in 2002 alone,according to Alberto Alvarado, SBA District Director in LosAngeles, who also attended the reception. Barrto called on moreparticipation from the more than 600 credit unions in Californiaand Nevada to advance SBA-secured loans to small businessentrepreneurs. “The President has said the role of government is tocreate an environment for small business,” Barreto said. “Taxrelief was a part of it. When we lowered the tax rate form 38% to35%, $75 billion was put in the hands of small business owners.”Barreto said business owners were also helped when deductions wereraised from $25,000 to $100,000. By cutting regulatory costs andred tape, they also saved $30 billion, he added. Going forward, theagency is backing a proposal on association health plans (AHPs).The plans would allow small business owners to pool together acrossstate lines so that they can negotiate better rates from insurancecompanies. “Right now, they can't buy insurance across statelines,” Barreto said. “Democrats and Republicans have voted infavor of (the plans). The problem is the Senate refuses to takethem up for a variety of reasons. We're hopeful to get a vote onit.” As part of Bush's “60 Stops in 60 Days” tour, which aims tohighlight proposed reforms to the Social Security system, Barretowarned of the adverse changes to come if something isn't done toturn the system around. “Every year that we wait, it adds $600billion and by 2018, we will be paying into it much more than wereceive,” Barreto said. Small businesses are just as likely to beaffected by the current system, he added. Many of them depend 100%on Social Security because they don't offer pensions or 401(k)plans. Meanwhile, 2005 is expected to be the “best year ever” inthe SBA's history, Barreto said. More than $16 billion is expectedto be approved for 7(a) loans and $5 billion for 504 loans. Also onhand at the reception was Bruce Thompson, SBA regionaladministrator, who shared his first experience of applying for anSBA loan more than 25 years ago. “The application looked like aphone book,” Thompson recalled. “I just needed a loan for $15,000.I went somewhere else. That's not the SBA today.” Thompson said theSBA Express Loan Program has reduced the application to one pageand the turnaround time is much faster. Alvardo thanked WesCorp forits role in launching the first extensive training program in thenation to help credit unions enter the SBA lending program. “Thetime for credit unions to emerge as potential member business andcommercial lenders is now,” Alvardo said. “Mr. Barreto has made iteasier to participate and NCUA regulations have also made iteasier.” Alvardo acknowledged two MBL heavyweights in the audience:Grace Mayo, president/CEO of $481 million Telesis Community CreditUnion and one of the founding members of the highly successfulBusiness Partners, LLC; and Steve von Rajcs, president/CEO ofMember Business Services in San Bernardino. Matt Davidson,executive vice president/COO of the California CU League, thankedWesCorp President Bob Siravo for hosting the event. Donna Jimenez,a representative from Rep. David Drier (R-Calif.)'s office, toldthe audience that the Congressman is a staunch supporter of creditunion legislation besides being a member. “No matter what districtyou live in, you are the ones that will make it happen for the momand pops that are starting their businesses in their garages,”Jimenez said. -

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