WASHINGTON – Stephan Galvan was already very familiar with the inner workings of the U.S. Small Business Administration when President Bush recently appointed him acting deputy administrator. Galvan has been with the agency since 2004 serving in high-profile roles as chief of staff and chief operating officer. He will continue in those positions while helping to manage more than 80 offices nationwide overseeing policy development and program supervision. The agency’s former chief information officer, Galvan is second in command to SBA Administrator Hector Barreto. Credit Union Times recently talked with Galvan about his new role and what’s at stake for credit unions and small business lending and whether banks should be concerned about the industry’s growing entry. CU Times: Hector Barreto recently spoke at the National Association of Federal Credit Union’s annual meeting and he mentioned that more credit unions are becoming SBA lenders and that they can help the agency extend its reach into areas that have minority populations, women-owned businesses and within the nation’s fastest growing cities. In your new role, how will you help to facilitate this? Galvan: My new role provides an excellent opportunity for promoting the SBA’s programs. We strive to support a broad-based network of business channels. Credit unions can provide an outlet of presences across the country. Internally, we can support decisions that can help credit unions become (facilitators) of the (SBA’s) programs. The agency will continue to do this. CU Times: Your predecessor Melanie Sabelhaus (who retired on June 15 to return to the private sector) along with Mr. Barreto started to become very visible within credit union circles when the agency opened up the 7(a) loan program a few years ago. Will you continue in that regard and what will be your message? Galvan: We will continue to support industry participation in the 7(a) lending program. It’s safe to say my message will be the same. There’s easy access to the SBA’s programs and what better source is there for entrepreneurs wanting to start their own businesses. CU Times: There is a push by some legislators to do away with the 7(a) loan program’s zero subsidy status and return funding back to Congress. What are your thoughts on this move? Galvan: The SBA will continue to support the zero subsidy. The President is in line with it. It provides stability and continuity. The SBA’s loan programs are up in every category. They’re up 20% over last year and last year was a record year. (With the zero subsidy), we get stability. CU Times: How are credit unions different from other financial lenders? Galvan: Most (SBA) participants are for-profit. As you well know, credit unions are not-for-profit and are a product of the consumer cooperative movement that dates back to the beginning of the last century. Credit unions see their clients as members. The balance is different. They’re not totally profit motivated. There is a need to balance the survival of the financial institution with the needs of the members. Also, our average loan size for a credit union is $112,000, which is less than the (agency’s) average (of $250,000). CU Times: For a number of reasons, mainly based on competition concerns, many bankers say credit unions should not be allowed to offer business loans. What is your take? Galvan: Credit unions need to be responsive to the needs of their members, otherwise why have them. It’s reasonable to assume that if members need business loans, credit unions could consider how to deliver them. Credit unions that don’t want to develop that expertise (on how to deliver them) should be allowed to (seek out ways to do it). CU Times: You were named “acting” deputy administrator. Is this a role you foresee yourself taking on a permanent basis? Galvan: I’m here serving at the pleasure of the President. Our job is to create the environment necessary to provide continuity of the (loan) programs. One of the challenges and blessings is working with a competent staff. It makes my life a lot easier. The whole approach (of the COO role) is to focus on program execution and focus on meeting our targets and goals. Even if you look at credit unions, we’ve increased participation from 59 in 2001 to more than 228. This is a good example. We’re continuing to make sure we reach out to as many people as possible. At NAFCU, Hector Barreto said he wants to see more (participation). I ask the credit unions to consider partnering with the SBA’s Web site. It’s a good starting point. [email protected]

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