WASHINGTON — Concerned with reports of "predatory and exploitative" lending practices in low-income and minority communities, the Small Business Administration yesterday took to task a bank over its activities.
At issue is Superior Financial Group's involvement with the SBA's Community Express loan program, which assist small businesses owned by women, veterans and minorities in underserved areas. Loan volume is capped at 10% of the total number of loans awarded in any fiscal year, according to SBA. Two lenders account for 80% of the loans, one of which is Superior, the agency said, adding the financial institution "has pushed hard to eliminate the cap."
SBA officials met with Superior bank officials yesterday to share its concerns with "misrepresenting facts" about Community Express, the public release of confidential and privileged SBA portfolio information and "apparent unwillingness until recently to offer other SBA loan products besides Community Express that could meet borrowers' needs."
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The agency said it has turned the matter over to SBA's office of inspector general. In February and again in April, SBA met with major Community Express lenders to remind them of the loan cap and encouraged them to shift to other SBA products.
Of the 337 Community Express lenders, 12 are credit unions, according to SBA. CUNA has been a supporter of the program calling for its expansion to community development CUs and other qualified CUs that serve underserved areas.
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