Washington, D.C. (July 19, 2023)—The Independent Community Bankers of America (ICBA) today commended the Senate Small Business Committee for advancing legislation to address ICBA-opposed Small Business Administration changes to its 7(a) small-business loan program.

“ICBA and the nation’s community banks commend the Senate Small Business Committee for advancing the Community Advantage Loan Program Act of 2023 to address changes to the Small Business Administration 7(a) loan program that ICBA has opposed since they were introduced last year,” ICBA President and CEO Rebeca Romero Rainey said. “ICBA looks forward to working with Congress as this legislation advances to fully address community bank concerns, including the SBA’s decision to lift the moratorium on the number of non-federally regulated institutions, including nonbank fintech companies, that can make loans under the 7(a) program.”

Introduced by committee Chairman Ben Cardin (D-Md.) and Ranking Member Joni Ernst (R-Iowa), the Community Advantage Loan Program Act of 2023 would help address recent SBA rules that threaten the viability of the 7(a) program. Specifically, the bill would:

  • Provide permanency to the Community Advantage program, which has operated as a pilot program.

  • Cap the number of Small Business Lending Companies to limit entry by nonbank fintech companies and address an SBA plan to lift the moratorium on new SBLCs.

  • Provide additional guardrails and authority for the SBA’s Office of Credit Risk Management to enhance oversight of non-federally regulated 7(a) lenders for which SBA serves as the primary regulator.

  • Reinstate the SBA Franchise Directory and Loan Authorization.

ICBA has repeatedly expressed its opposition to the SBA changes. In recent testimony before the House Small Business Committee, a statement on the release of the SBA’s final rule, a comment letter to the SBA, and in joint letters to the agency and Congress last year, ICBA said the SBA rushed its rulemaking process, noted that nonbank fintechs have higher default rates, and warned the agency’s rule would harm the very borrowers it is trying to aid. Most recently, ICBA and other groups delivered a joint letter to the committee ahead of today’s markup expressing appreciation for provisions of the Community Advantage Loan Program Act that will help address concerns with the rulemaking.

ICBA nevertheless remains concerned with the SBA’s decision to lift the moratorium on the number of non-federally regulated institutions that can make loans under its 7(a) program while simultaneously loosening underwriting standards. ICBA looks forward to continuing to work with lawmakers to advance legislative solutions that will preserve 7(a) loan program integrity.

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 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.