Washington, D.C (Jan. 17, 2018)—The Independent Community Bankers of America® (ICBA) today testified before the House Small Business Committee on the need for a robust Small Business Administration 7(a) program. ICBA community banker Cynthia Blankenship expressed support for targeted reforms to ensure the program continues expanding the reach of lending and credit services to a broader range of borrowers who would not qualify for a conventional loan.
“The Small Business Administration’s 7(a) loan program allows community banks to leverage their unique underwriting skills to more effectively serve the small businesses in their communities,” said the chairman and corporate president of Bank of the West in Grapevine, Texas. “A robust and sustainable 7(a) program with broad community bank participation will help small businesses thrive and create jobs, strengthening and extending the economic recovery.”
In her testimony, Blankenship noted that ICBA supports the bipartisan Small Business 7(a) Lending Oversight Reform Act (H.R. 4743), which would:
- strengthen the integrity of all SBA guaranteed lending programs by codifying the SBA Office of Credit Risk Management and Lender Oversight Committee, increasing transparency in the office’s budget, providing guidelines for lender reviews and lender appeals rights;
- safeguard the 7(a) program from abuse by codifying the SBA’s “Credit Elsewhere Test,” which requires lenders to fully substantiate and document the reasons a given applicant cannot be served with conventional credit; and
- stabilize 7(a) program funding by allowing the SBA to lift the cap on general business loans by up to 15 percent of the limit if the cap is reached, as it was in 2015, which disrupted SBA lending and required emergency legislation.
ICBA looks forward to working with the House Small Business Committee to help shape the 7(a) bill as it makes its way through the legislative process and urges members to support the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) when it is sent over from the Senate in the coming weeks.
The Independent Community Bankers of America®, the nation’s voice for nearly 5,700 community banks of all sizes and charter types, 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. For more information, visit ICBA’s website at www.icba.org.