ICBA and other groups called on Congress to oppose Small Business Administration proposals to detrimentally reform its 7(a) lending program.
Proposals: In a joint letter, the groups expressed concerns with SBA proposals to:
Lift the moratorium — which has been in place since 1982—on the number of non-federally regulated institutions, including nonbank fintech companies, that can make loans under the 7(a) program.
Loosen or remove the 7(a) program's requirements for how lenders underwrite loans and how borrowers may use loan funds.
Concerns: The proposals would harm long-existing, prudent lending standards that have ensured the 7(a) program's integrity for decades, the groups said. They also warned that the proposal could harm the very underserved borrowers the SBA is trying to aid.
Congressional Role: The groups said they will submit formal comments to the SBA opposing the proposals, though it called on lawmakers to engage the agency given Congress's interest in ensuring the integrity of SBA's cornerstone loan program.