SAN ANTONIO -- UNITED SA Federal Credit Union was recently granted Express lender status from the Small Business Administration.

The SBA's Express lender program allows for loans up to $350,000 and offers a more streamlined application process. According to the credit union, the new lending status will help UNITED SA assist more of its members and the Bexar County community, many of whom are current or aspiring business owners.

"We are excited to be able to offer SBA Express lending to members and potential members," says Steve Coomes, president/CEO of $215 million UNITED SA. "Many people in this community aspire to become entrepreneurs and we look forward to helping them realize their dreams of business ownership or expansion."

Dupaco Community Approves Iowa's First SBA Patriot Express Loan

DUBUQUE, Iowa -- The Small Business Administration recently said Dupaco Community Credit Union is the first financial institution in Iowa to approve one of its Patriot Express loans.

Launched in June, the pilot program offers loans up to $500,000 that also qualify for SBA's maximum guaranty of up to 85% for loans of $150,000 or less and up to 75% for loans over $150,000 up to $500,000. For loans above $350,000, lenders are required to take all available collateral, the agency said. The loans are targeted at veterans and members of the military community who want to establish or expand a small business.

The $456 million Dupaco Community CU approved its first Patriot loan to Asbury Family Chiropractic, owned and operated by Dr. Greg Crowley, a veteran of the

U.S. Navy.

NCUA Board member Gigi Hyland, who serves as the agency's liaison to SBA, attended the June launch of the Patriot loan program and has said the initiative is another way for credit unions to offer an opportunity to rebuild or start new businesses.

GO Loans Surpass $55 Million Mark

WASHINGTON -- After nearly two years in place, the Small Business Administration's Gulf Opportunity Pilot Loan program, which provides loans for small businesses impacted by 2005's hurricanes, has topped the $55 million mark.

Launched in November 2005, the GO Loan program allows credit unions and banks that are Preferred and Express lenders to use their own forms and underwriting to get working capital into the hands of small business owners in the hurricane-impacted Gulf region. Modeled after the SBA Express loan program, GO loans are available up to $150,000; have an 85% guarantee; and applicants will have a decision in 24 hours or less.

The SBA said it backed 423 GO loans for $35,628,500 in fiscal 2006, and has guaranteed 272 GO loans for $21,315,000 as of Sept. 21, 2007.

The GO Loan Program was initially set to end on Sept. 30, but the SBA recently extended the program to Sept. 30, 2008.

Under the new directives extending GO loans through fiscal 2008, existing PLP lenders without SBA Express authority that wish to participate in the program will have their requests handled on an expedited basis, SBA said. Lenders not operating under PLP or SBA Express authority must meet the requirements set forth in the SBA Express Program Guide for SBA lenders.

FASB Mutual Business Combinations Rule Delayed

NORWALK, Conn. -- After six years of work, the Financial Accounting Standards Board decided to wait another week to unveil its final rule on accounting in mutual business combinations.

FASB had planned to unveil its final rule Oct. 11, according to Patelco Credit Union Chief Financial Officer Scott Waite, but has now delayed the release. According to CUNA, the release has been postponed until Oct. 18; Waite serves as chairman of CUNA's Accounting Task Force.

FASB's rule will shift credit unions and other cooperatives from the pooling to the purchase method of accounting. The rule, Waite had said, will have an effective date of Jan. 1, 2009.

Last year, the Financial Services Regulatory Relief Act changed the definition of net worth in the federal Credit Union Act to avoid the unintended consequence of not counting an acquired credit union's net worth toward the combined entity's net worth. "We worked very diligently at the legislation...That alleviates much of the burden," NAFCU Associate Director of Regulatory Affairs Tessema Tefferi commented. In addition, Spencer Bachus (R-Ala.), then a senior Republican on the committee while the party was in the majority, introduced a stand-alone bill in case the regulatory relief bill did not look like it would become law.

Theoretically, without the legislative change, the combined entity's net worth would be cut virtually in half, in practical terms, making it appear less safe and sound and likely on the verge of failure on paper.

FASB, at the time, testified that it did not oppose such a change in the law. Waite said that there were other clear instances where FASB took specific credit union issues into account as well. He added that the method was field tested in three entities, including one credit union.

Regardless, purchase method accounting is coming and credit unions should be prepared. "Please don't wait until the last minute because the purchase accounting method will be new for some folks," Waite said.

NCUA Staff Considering Recommendation on Defining Standard Of Care

WASHINGTON -- NCUA staff have begun considering whether to recommend the agency start moving toward clarifying the "standard of care" credit union board members should adopt when their institutions are confronting key events such as CU-to-bank charter change conversions, according to NCUA General Counsel Bob Fenner.

Fenner also listed changes in insurance as an example of the sort of structural change to which the agency staff has started to pay attention to the standard of care question.

"Major structural changes, such as insurance and charter conversions, have a dramatic effect on the ownership rights of credit union members," Fenner said, clarifying comments he made previously to a meeting of credit union attorneys.

"While it is clear that directors and management of an insured credit union have a duty under Title II of the FCU Act to act in the members' best interests, there is no clear statement in federal law concerning the standard of care. Because the applicability of state law is unclear, and standards vary greatly from state to state, staff is considering, as part of an overall review of NCUA regulation of structural changes, whether to recommend that the NCUA Board consider establishing a federal standard of care."

Fenner spoke to CUNA's Attorneys Conference that was held in Jackson Hole, Wyoming.

Legal sources explained "standard of care" as something of the practical subset of fiduciary duty, that it helps explain what is actually required if a credit union board member is seeking to act according to their fiduciary duty. The problem is that there is no uniform standard for federal credit unions about what that would be because the standards of care shift a good deal from state to state.

"No doubt this will be a needed change," said Steven Bisker, a noted credit union lawyer. "It will be a benefit to credit union board members across the country who can find it difficult to get a firm footing in different state laws."

Rooting the standard of care in state law can sometimes result in a circular standard, Bisker explained, where on the one hand a credit union board can look to state corporate law for a standard of care only to find that the state corporate law only applies to corporations chartered by that state, something which explicitly would not apply to federally chartered credit unions.