NAFCU: SBA's Capital Programs will `Suffer' Under Agency's Zero Subsidy
ARLINGTON, Va. - The U.S. Small Business Administration's popular 7(a) program, currently operating under a zero subsidy, coupled with any fee increases, could hurt credit unions in a number of ways, NAFCU recently said. NAFCU President/CEO Fred Becker wrote that credit unions and their members have already faced increased fees...
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ARLINGTON, Va. – The U.S. Small Business Administration’s popular 7(a) program, currently operating under a zero subsidy, coupled with any fee increases, could hurt credit unions in a number of ways, NAFCU recently said. NAFCU President/CEO Fred Becker wrote that credit unions and their members have already faced increased fees three years in a row in a April 3 letter to House Small Business Committee Chairman Donald Manzullo (R-Ill.) and New York Democrat Rep. Nydia Velazquez, who is also the ranking member of the committee. “The SBA’s access to capital programs will undoubtedly suffer, programs vital to credit unions will become more expensive and the result will be less accessibility and capital for small businesses and lenders,” Becker wrote. At a March 9 House Subcommittee on Tax, Finance and Exports hearing on SBA’s programs, the agency’s associate deputy administrator, Michael Hager, testified the 7(a) program fees would increase to the “maximum level of 55 basis points,” Becker said, adding the SBA also plans on continuing its zero subsidy level by seeking to cover more of its expenses through “fee authority.” Loans larger than $1 million would also be subject to higher fees. Becker called on the committee to support “adequate funding” for the 7(a) loan program so that credit unions could continue to help their members. “Today, over 250 credit unions offer much needed capital to their members so that the dream of owning a small business can be realized,” Becker wrote. “Credit union members all too often are unable to secure 7(a) loans through other lenders and turn to their credit unions to offer them a hand in their small business dream.” Becker told the committee that NAFCU had worked with SBA Administrator Hector Barreto to make all credit unions eligible to participate in the 7(a) loan program and “was pleased to see this come to fruition in February 2003.” “As leaders on championing efforts to provide access to capital for our nation’s small business and entrepreneurs, your role has been critical in ensuring the success and stability of programs administered by the SBA,” Becker said. “NAFCU requests your leadership in adequately funding the SBA 7(a) program so that credit unions can continue to help their members and America’s small businesses can continue to flourish and improve our nation’s economy.” -
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