Washington, D.C. (March 16, 2022) — The Independent Community Bankers of America (ICBA) today told Congress that community banks are critical to the success of Small Business Administration lending programs, which should not be undermined by instituting direct SBA lending under its 7(a) program.
Robert J. Barnes—president and CEO of PriorityOne Bank in Magee, Miss.—told the House Small Business Committee’s Subcommittee on Oversight, Investigations, and Regulations that while community banks are instrumental in the Paycheck Protection, 7(a), and 504 programs, the SBA has a poor track record of direct lending.
“The SBA retreated from direct lending as an ill-conceived experiment,” said Barnes, chairman of ICBA’s Legislative Issues Committee, a member of the ICBA Federal Delegate Board, and a volunteer leader with the Mississippi Bankers Association. “Congress must not repeat this mistake. The recent Economic Injury Disaster Loan (EIDL) program, an SBA direct loan program, has been rife with fraud and poorly executed. Congress should heed this warning before creating a direct 7(a) program.”
In his testimony, Barnes said:
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 roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding nearly $5.9 trillion in assets, over $4.9 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.