Washington, D.C. (Sept. 30, 2021) — The Independent Community Bankers of America (ICBA) today called on Congress to reject proposed changes to the Small Business Administration 7(a) loan program that would displace community bank SBA lending.
Testifying before the House Small Business Committee, Bank of Charles Town, W.Va., President and CEO Alice Frazier said experimenting with direct 7(a) lending by the SBA — in which the agency has a poor track record — would jeopardize access to credit for small businesses.
“The 7(a) program is invaluable in allowing us to support local small businesses that would not otherwise qualify for conventional credit. Community banks accounted for 66% of 7(a) loans between 2010 and 2021, meeting the needs of the smallest borrowers,” said Frazier, who is chair of ICBA’s Policy Development Committee and a member of its board of directors. “The SBA retreated from direct lending as an ill-conceived, costly experiment. Congress must not repeat this mistake.”
In her testimony, Frazier said:
- After providing nearly 60% of Paycheck Protection Program lending, community banks should not be sidelined in the critical task of creating access to capital.
- Establishing a direct lending program to compete with 7(a) experts would needlessly risk diminishing program participation, increase fraud, and put taxpayer dollars at risk.
- While the PPP displaced 7(a) lending in 2020, the SBA has already guaranteed a record $30.1 billion in lending in 2021 — contradicting claims that 7(a) lending has declined.
For more information, visit icba.org.
About ICBA
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.
With nearly 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org
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