WASHINGTON — The Small Business Administration and CUNA came together earlier this week for an audio conference to discuss how the two could further encourage business lending industry given the current environment.
Grady Hedgespeth, SBA's director of financial assistance, detailed an interim final rule adopted by the agency which uses an alternative base rate for determining the interest applied to certain SBA loans. Hedgespeth also discussed weighted average coupons for formulation of pools, which allows the aggregation of multiple coupon rates.
Frank Kressman, NCUA staff attorney, discussed the member business lending rule and its relation to SBA lending. In regard to safety and soundness concerns, "NCUA has determined that MBLs [are] riskier than consumer loans, and as a result there are various safety and soundness checks and balances specific to MBLs," CUNA noted.
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The SBA said its Community Express pilot program, which assists small businesses in underserved areas, is "ideal" for CUs. Under the agency's 504 loan program, CUs were also reminded that they are not in violation of NCUA Part 723 as long as they are granted certain waivers for exemption from certain loan to value restrictions.
During a question and answer period, SBA responded to a query about whether there will be changes to loan fees. Lending is "way down recently" but low demand and tightened credit standards are among the reasons why rather than fees, SBA said.
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