ICBA expressed concerns with a Small Business Administration announcement that it has licensed three new Small Business Lending Companies for its 7(a) loan program.
SBA Announcement: The SBA announced the new licenses—including for the nonbank fintech company Funding Circle—while Congress is advancing ICBA-advocated legislation responding to the agency’s recent changes to its 7(a) program.
ICBA Response: In a national news release, ICBA urged the SBA to abide by its previous commitment to limit the number of new licenses to three to help preserve the integrity of the program. “The SBA’s decision to extend new 7(a) Small Business Lending Company licenses risks undermining this vital program and the borrowers who rely on it,” ICBA President and CEO Rebeca Romero Rainey said.
Background: The SBA’s rule changes to its 7(a) program lifted the long-standing moratorium on the number of lenders in the program. It also loosened the 7(a) program’s requirements for how lenders underwrite loans and how borrowers may use loan funds.
Congressional Response: The Senate Small Business Committee voted in July to advance legislation to address the ICBA-opposed SBA 7(a) changes. The Community Advantage Loan Program Act of 2023 would limit the entry of nonbank fintechs and bolster their regulatory supervision.
ICBA Advocacy: ICBA has expressed its opposition to the SBA changes in letters to the House and Senate Small Business committees, 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.