WASHINGTON — America’s Credit Unions is supporting a Small Business Administration proposal to modernize its small-business size standards, saying the changes could expand access to capital, generate additional demand for SBA-backed loans and encourage more credit unions to become SBA lenders.
In a Sept. 21 comment letter to the SBA, the trade group said the proposal would update eligibility standards to better reflect inflation, business growth and current market conditions. The SBA estimates approximately 114,000 additional businesses would qualify as small entities under the proposed standards, according to America’s Credit Unions.
The organization said expanding the pool of eligible businesses would allow credit unions to provide SBA-backed financing to more companies, including businesses that have difficulty obtaining funding from other lenders.
America’s Credit Unions represents institutions serving more than 146 million members nationwide.
Simplifying Industry Classifications
The trade group also supported the SBA’s proposal to reduce and simplify the use of North American Industry Classification System codes when determining whether businesses qualify for agency programs.
Simplifying those classifications would make it easier for lenders and businesses to determine eligibility, America’s Credit Unions said. The changes also could lower compliance costs, reduce classification errors and make SBA programs more accessible, the organization said.
America’s Credit Unions pointed to credit unions’ participation in the Paycheck Protection Program as evidence of the industry’s ability to reach underserved businesses. The group said 87% of its members reported making PPP loans to new members and businesses that had previously been unable to obtain financing elsewhere.
Credit unions disproportionately served the smallest businesses during the pandemic-era program, demonstrating their commitment to expanding capital access during periods of financial stress, America’s Credit Unions said.
Group Seeks Updated CU Thresholds
America’s Credit Unions also urged policymakers to modernize the standards used to define small credit unions, arguing that inflation, consolidation and asset growth have made existing thresholds less relevant.
The trade group said 4,250 federally insured credit unions held $2.48 trillion in assets during the first quarter of 2026, compared with 6,021 credit unions holding $1.2 trillion in 2015. The average credit union’s assets increased during that period from approximately $199 million to $583 million, the organization said.
Despite that growth, credit unions remain relatively small compared with banks, America’s Credit Unions said. The average Federal Deposit Insurance Corp.-insured bank holds approximately $6.28 billion in assets, more than 10 times the average credit union’s assets, according to the group.
America’s Credit Unions said smaller credit unions frequently have limited staffing and compliance capacity, causing new regulations to place a disproportionate burden on their operations. Updating the size standards would give more credit unions access to programs and regulatory protections intended for small entities while helping them compete in the financial services market, the organization said.
More Voices in Rulemaking
Reclassifying additional credit unions as small businesses also would allow more institutions to participate as small-entity representatives on panels conducted under the Small Business Regulatory Enforcement Fairness Act, America’s Credit Unions said.
Those panels give small entities an opportunity to explain how proposed regulations could affect their operations before agencies finalize the rules.
Expanding credit union participation would give federal agencies a clearer understanding of the staffing, compliance and operational challenges confronting smaller financial institutions, the trade group said. That feedback could help agencies tailor requirements more effectively and avoid unnecessary regulatory burdens, it added.
“The proposal will expand access to capital for small businesses, increase opportunities for credit unions to participate in SBA lending programs, and ensure that SBA’s size standards continue to reflect current economic conditions and market realities,” Regulatory Advocacy Counsel Tyler Maron wrote in the letter.
