Strengthening SBA’s 7(a) Loan Program
WASHINGTON—Today, Chairman Steve Chabot (R-OH) and the Committee on Small Business heard from a panel of key stakeholders about the Small Business Administration’s (SBA) 7(a) Loan Program and H.R. 4743, the Small Business 7(a) Lending Oversight Reform Act of 2018.
“The economy is improving. Treasury numbers are moving in the right direction. The tax reform law is being implemented. However, we continue to see that lending and borrowing remain flat. This becomes more acute for the nation’s smallest firms.” said Chairman Chabot. “As a result of multiple hearings, meetings, and briefings, I, along with the Ranking Member and our Senate counterparts introduced H.R. 4743, the Small Business 7(a) Lending Oversight Reform Act of 2018.”
What the Stakeholders Said:
The 7(a) Loan Program is the SBA’s largest lending program, and because lenders are charged fees to run the program and cover any losses, it currently runs on zero-cost to American taxpayers. Newly introduced, H.R. 4743 is bicameral and bipartisan legislation aimed at ensuring the integrity of the program, while bringing stability to small businesses that truly require the services of SBA.
“While community banking organizations represent 17 percent of all U.S. bank assets, we make more than half of all small business loans under $1 million,” said Cindy Blankenship, Vice Chairman of Bank of the West in Grapevine, TX, testifying on behalf of the Independent Community Bankers of America. “What sets community banks apart is their first-hand knowledge of the borrower, the community, and the local economy. Community bank small business lending simply cannot be duplicated by a bank based outside the community.”
“American Bankers Association (ABA) applauds Chairman Chabot and Ranking Member Velazquez for their leadership in working with their Senate counterparts,” noted Patricia Husic, President and CEO of Centric Financial Corporation in Harrisburg, PA, testifying on behalf of ABA. “This long overdue bill will strengthen the SBA’s oversight office and provide the Administrator with flexibility to increase the program’s maximum lending authority in the event it would be reached. The bill helps ensure the strength of the program into the future.”
“Overall, we believe this is a solid legislative package and would urge the Committee to support and advance this legislation in a timely fashion,” said Sonya McDonald, Executive Vice President and Chief Lending Officer at Randolph-Brooks Federal Credit Union in Universal City, TX, testifying on behalf of the National Association of Federally-Insured Credit Unions.
“There has been great care taken by this Committee to approach this issue with diligence and as the CEO of the SBA 7(a) industry’s trade association for the last thirty years, I can tell you honestly that your careful approach to this matter is a rarity in the history of this program and incredibly appreciated,” stated Anthony Wilkinson, President and CEO of the National Association of Government Guaranteed Lenders. “As Chairman Chabot has stated in front of this Committee in the past, this program should supplement the markets, not supplant them.”