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ARLINGTON, Va. – While a proposed lender risk rating system from the Small Business Administration would be a helpful peer comparison tool, NAFCU is concerned it may be applied unfairly in some circumstances.

The system would be an internal tool to assist the agency in assessing the risk of each active 7(a) lender and certified development company’s SBA loan operations and loan portfolio, on a uniform basis and for identifying those institutions whose SBA loan operations and portfolio require additional monitoring or other action. Under the system, SBA would also assign each lender a composite rating based on certain portfolio performance factors, which may be overridden in some cases due to lender specific factors that may be indicative of a higher or lower level of risk, the agency said. SBA lenders would have access to their own ratings through SBA’s Lender Portal. The risk rating system would also be used to assess the aggregate strength of SBA’s 7(a) and 504 portfolios.

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