Credit unions will be able to help credit-deprived businesses if the cap on member business lending were raised and if certain SBA lending programs were modified, Randolph-Brooks Federal Credit Union Senior Vice President Mark Sekula told the House Small Business Committee last Wednesday.
Sekula, who testified on behalf of NAFCU, described the current cap-12.25% of assets- as “antiquated and arbitrary,” and reiterated NAFCU's support for a bill to lift the cap to 25%. He also urged the reintroduction of a measure to exempt credit union participation in SBA lending programs from counting against the current member business lending cap.
In addition, he endorsed a package of capital access bills passed by one of the panel's subcommittees that would help credit unions do more business lending by assisting small lenders that are not part of the SBA's preferred lending program. The bills would also expand lending programs in rural areas and for veterans.
The measures would also simplify the application process for the business loan program created by the stimulus bill passed by Congress earlier this year and raise the maximum amount of each loan from $35,000 to $50,000.
They would extend the elimination of borrowers' fees on certain loans until the end of 2011.
Sekula said these changes are “an important step to help our nation recover from the current economic downturn.”
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