WASHINGTON (6/21/12)--Congress should reauthorize the U.S. Small Business Administration's (SBA) 504 refinance loan program and the SBA 504 First Mortgage Lien Pool (FMLP) program to enable credit unions to continue helping small business grow, Redwood CU President/CEO Brett Martinez, a member of the Credit Union National Association (CUNA) board, is expected to tell a House subcommittee today.
Martinez's 220,000-member, $2 billion-asset Santa Rosa, Calif.-based credit union is the largest SBA credit union lender in the country by loan volume. He plans to tell the House Small Business subcommittee investigations, oversight and regulations that SBA guaranteed loans are important for borrowers who otherwise would not be able to get a conventional business loan, but add they are complicated to make.'
He also plans to tell lawmakers that despite the statutory cap on member business loans--12.25% of assets-- at the end of 2011, credit unions had $40 billion in business loans outstanding, making it the fastest growing type of credit union lending over the last several years and representing approximately 6% of the depository institution market. CUNA supports legislation that would increase the cap to 27.5% of assets to enable credit unions to do more to support small businesses and boost the economy.
In addition, he will reiterate CUNA's support for the SBA's adaption of a single electronic lender application which will reduce the paperwork burden at credit unions and should result in increased lender participation. SBA should also develop an optional credit scoring methodology to be used by SBA lender partners in the underwriting process in an effort to lower lenders' costs of delivering capital to borrowers.