WASHINGTON–Numerous credit union trade groups are expressing support for the Protecting Access to Credit for Small Businesses Act, which prohibits the Small Business Administration (SBA) from making direct loans through its 7(a) program.
“Financial inclusion and access to capital for entrepreneurs are critical in ensuring the growth and development of vibrant small businesses,” said America’s Credit Unions President and CEO Jim Nussle in a statement. “The SBA government guaranteed lending programs, like 7(a), demonstrate successful public-private partnerships that work as borrowers can obtain loans from credit unions that they know and trust. Direct lending from the SBA would invalidate this partnership, driving up program costs and disincentivizing 7(a) Loan Program authorization within financial institutions.”
In a letter to the sponsor of the Senate bill, Sen. Tim Scott (R-SC), Nussle said “establishing and retaining a relationship with a credit union is the best way for a small business entrepreneur to partner with a provider of essential financial services.”
Additional Support
Other groups have also expressed support.
“The Carolinas Credit Union League fully supports Chairman Scott’s Protecting Access to Credit for Small Businesses Act,” Dan Schline, president and CEO, Carolinas Credit Union League, said in a statement. “We greatly appreciate his leadership in ensuring small businesses can continue to access capital through mission-driven lenders like credit unions – institutions that truly understand and serve the unique needs of their communities, rather than relying on a one-size-fits-all approach.”
DCUC Offers Its Feedback
Similarly, the Defense Credit Union Council (DCUC) announced its “strong support” for the legislation.
“We are grateful to Senator Tim Scott and his colleagues for standing up for America’s military entrepreneurs,” said Anthony Hernandez, DCUC president/CEO, in a statement. “This bill ensures that credit unions can continue to provide personalized, community-based lending services to our servicemembers, veterans, and their families. It is a critical step toward halting unnecessary government overreach and preserving trusted private-sector partnerships.”
Prohibiting the SBA from making direct loans will protect community-based lending in military communities and keep decision-making local, the DCUC said.
Reforms Urged
The Defense Council noted it has long advocated for reforms to SBA programs that would level the playing field for credit unions and remove regulatory barriers to participation.
“Key among these is the outdated member business lending (MBL) cap, which limits most credit unions’ business lending to just 12.25% of their assets — a restriction that hampers their ability to support growing veteran-owned businesses,” DCUC said, adding that is the reason is champions the Member Business Loan Act, which would exempt loans made to veteran-owned businesses from the MBL cap.
