The U.S. Capitol Rotunda. (Photo: Diego M. Radzinschi/ALM)

Former Sen. Kelly Loeffler (R-Ga.) is scheduled to appear in front of the Senate Small Business and Leadership Committee this Wednesday as part of her confirmation process to become Administrator of the Small Business Administration (SBA). As part of Wednesday’s hearing, officials with the Defense Credit Union Council (DCUC) sent a letter to Committee leaders listing several items they believe are challenges credit unions face with the SBA. Also included in the two-page letter were ways to strengthen the partnership between the SBA and the credit union industry.

In the letter, DCUC Chief Advocacy Officer Jason Stverak emphasized how credit unions have carried a long history supporting military- and family-owned businesses by “providing tailored financial services that continue to foster local economic growth.”

With a new leader set to run the SBA, DCUC said it hopes lawmakers and Loeffler, once confirmed, will see the “ongoing challenges” credit unions have with the SBA that stifle the industry’s “ability to fully leverage” resources to support the small business community.

According to DCUC’s letter, those challenges included the following:

  • Complex and bureaucratic processes: The SBA loan process is often overly complex, creating administrative burdens that discourage many credit unions from participating in SBA lending programs.
  • Limited collaboration with credit unions: Despite being vital financial partners, credit unions often face barriers to accessing SBA programs on par with larger banks.
  • Inequities in lending caps: Credit unions are subject to member business lending (MBL) caps, which restrict their ability to provide small business loans, even though they are proven safe and sound lenders.
  • Veteran entrepreneurship access to capital: Veteran-owned businesses still face significant hurdles in accessing the capital they need to thrive, a gap that defense credit unions are eager to fill.
Stverak included in the letter four ways the SBA could work better with credit unions to create a stronger partnership for small business lending support.

Those items included the following reforms:

  • Streamline SBA loan programs: Simplify and modernize the SBA’s loan application and approval processes to reduce administrative burdens on credit unions and small business borrowers.
  • Expand SBA engagement with credit unions: Actively involve credit unions in the development of SBA initiatives and provide equitable access to programs to ensure all small businesses, particularly veteran-owned businesses, benefit from SBA resources.
  • Support the veterans member business loan act: Strongly encourage the Committee and Administrator Loeffler to support the Veterans Member Business Loan Act. This bipartisan legislation would exempt loans to veteran-owned businesses from the MBL cap, empowering credit unions to better serve veteran entrepreneurs without unnecessary regulatory constraints.
  • Enhance access to capital for underserved communities: Collaborate with credit unions to identify and address gaps in access to SBA programs, particularly for minority, veteran and rural entrepreneurs.
“We believe the confirmation presents an opportunity to strengthen the relationship between the SBA and credit unions, fostering a collaborative environment that benefits small businesses across the country,” Stverak wrote.

The Senate Committee hearing concerning Loeffler’s nomination is scheduled for Jan. 29 at 2:30 p.m. EST.

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Michael Ogden

Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.

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