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WASHINGTON – The momentum continued in 2005 for credit unions as they made more of a presence in the member business lending arena. As of the end of the second quarter, the most current data from Callahan & Associates, Inc., CUs had more than $14 billion in MBLs outstanding compared to nearly $12 billion for all of 2004. As of Sept. 30, CUs produced 1,172 SBA loans totaling $122,695,618 in guarantees. More than 250 CUs are now 7(a) lenders. A number of credit unions pooled their resources and launched jointly-owned MBL credit union service organizations. Among them were Heartland Business Services, LLC, which began taking loan applications in late November. The CUSO was formed by eighteen Missouri credit unions, the Missouri Credit Union Association and Missouri Corporate Credit Union. Seven Austin, Texas-based credit unions took advantage of that city’s reputation for being among the top five small business-friendly environments and formed CU Business Solutions. Another Texas CUSO, formed by five CUs, Business Lenders Group, LLC, opened on Aug. 1. The $1.8 billion Eastern Financial Florida CU launched CU Business Capital, LLC in July. Community Business Lenders, LLC was launched by the Iowa Credit Union League, along with $94 million Members 1st Community CU and $164 million Community Choice CU. It appears that the SBA will continue operating its 7(a) loan program with a zero subsidy, which means borrowers and lenders will pay for the designation through fees. CUNA, along with several other trade groups, joined together over the summer to ask Congress to consider funding the program for $79 million. Their reasoning was since 7(a) loans have provided more than $90 billion to small businesses, an “adequate appropriation would (continue) to stimulate economic growth.” Critics of the zero subsidy say it has come at a cost because fees to participate in the program have increased. The SBA has said the designation allows more leeway and prevents a shutdown, similar to what happened a few years ago when the 7(a) program ran out of money. NCUA sought feedback on what would be the minimum capital requirements a federally-insured CU must meet in order to make unsecured MBLs to non-member CUs and corporate CUSOs. The majority of comment letters came from $351 million Central Minnesota FCU, which expressed concern that any changes would hurt its booming agricultural lending program. Meanwhile, Missouri continued to push forward in bringing its MBL rules for state-chartered credit unions in line with NCUA’s rules CUNA Mutual Group launched an innovative investment fund that initially would target MBLs. The CU Systems Fund allowed for the purchase of business loans from CUs and the sale of shares in them to interested CUs. So far, $15 million loans have been purchased and 12 credit unions and CUSOs have gone through the certification process to participate in the fund with another dozen CUs expressing interest, said Jennifer Novinska, CU Systems Fund operation manager. CU Business Group, a corporate CU-owned CUSO, celebrated its third anniversary this year by underwriting more than $300 million in loans. NACUSO held its first-ever Business Services Collaborative in the fall with more than 65 representatives attending to gain more insight on MBLs and business services and WesCorp was named the SBA’s Marketing Partner of the Year for its role in minority enterprise development. -

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