CUNA Comment Letter

Interim Final Rule to Increase the Size of Businesses Eligible for the Section 7(a) Loan Program

August 3, 2009

Mr. Carl J. Jordan
Acting Division Chief for Size Standards
U.S. Small Business Administration
409 3rd Street, SW – Eighth Floor
Washington, DC 20416

Dear Mr. Jordan:

The Credit Union National Association (CUNA) appreciates the opportunity to comment on the interim final rule that temporarily changes the size criteria of businesses that will be eligible for the Small Business Administration’s (SBA’s) 7(a) Business Loan Program. In addition to the current threshold, the rule includes an alternative small business size standard that is the same standard that applies to the SBA’s Certified Development Company Program. Under this alternative standard, a small business will now be eligible for the 7(a) program if it has a tangible net worth of no more than $8.5 million and average net income after Federal income taxes for the preceding two fiscal years that is no more than $3 million. CUNA is the largest credit union advocacy organization in this country, representing approximately 90 percent of our nation’s 8,000 state and federal credit unions, which serve nearly 92 million members.

Summary of CUNA’s Comments

• CUNA supports the temporary change in the size criteria of business eligible for the 7(a) Business Loan Program and urges that this change be made permanent.
• CUNA and credit unions want to continue to work with the SBA on other means in which to facilitate SBA lending.

Discussion

CUNA supports the temporary change in the size criteria of businesses eligible for the 7(a) Business Loan Program, which will end on September 30, 2010. We also urge that this change be made permanent before that time. This change in the size criteria should help facilitate additional small business lending, which is a goal that we all share, especially in light of the current economic crisis. The 7(a) Business Loan Program, as well as other SBA programs, has been very helpful for credit unions in their efforts to provide credit to their members who own small businesses.

We are also very appreciative of the SBA’s efforts to include CUNA and others in discussions and meetings on how to expand the SBA lending programs among various types creditors, including credit unions. CUNA and credit unions want to continue to work with the SBA and Congress in these efforts to achieve goals such as:

• making permanent the current 90% guarantee of SBA 7(a) loans that was provided temporarily under the Housing and Economic Recovery Act of 2008;
• additional limitations on fees for all SBA lending programs; and
• ensuring that the SBA has sufficient personnel to review loan applications, process guarantee payments to lenders, and handle other problems that arise with specific lenders.

Thank you for the opportunity to comment on the interim final rule that temporarily changes the size criteria of businesses that will be eligible for the SBA’s 7(a) Business Loan Program. If you or agency staff have questions about our comments, please contact Senior Vice President and Deputy General Counsel Mary Dunn or me at (202) 638-5777,

Sincerely,

Jeffrey P. Bloch
Senior Assistant General Counsel

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