ICBA and other groups urged the House Small Business Committee to work toward a bipartisan response to recent Small Business Administration changes to its 7(a) loan program.
Joint Letter: Ahead of a markup slated for this Thursday, the groups said they remain concerned that the SBA’s decision to lift the moratorium on the number of non-federally regulated lenders in the 7(a) program while loosening underwriting standards may harm the performance of 7(a) loans, threaten the integrity of the program, and lead to increased borrower and lender fees.
Policy Views: Among their policy recommendations, the groups called on lawmakers to reinstate prudent underwriting criteria for SBA lending, protect the statutory authority provided lenders under their Preferred Lenders Program designation, and cap the number of Small Business Lending Companies to prohibit the SBA from expanding the number of non-federally regulated lenders for which it serves as primary regulator.
Background: The Senate Small Business Committee voted in July to advance its version of legislation to address the ICBA-opposed SBA 7(a) changes. Responding to ICBA’s outreach, the Senate panel voted 18-1 to advance the Community Advantage Loan Program Act of 2023, which would limit the entry of nonbank fintechs and bolster their regulatory supervision.
ICBA Advocacy: ICBA has expressed its opposition to the SBA changes in a joint letter to the Senate committee, congressional testimony this year, a statement on the SBA’s final rule, a comment letter to the agency, and in joint letters to the SBA and Congress last year.