NAFCU to Small Business subcommittee: Credit unions provide value to the nation’s small businesses

WASHINGTON, DC (June 29, 2017) — Natasha Merz, vice president of commercial lending for Langley Federal Credit Union (Newport News, Va.), will testify today on behalf of the National Association of Federally-Insured Credit Unions (NAFCU) before a House Small Business subcommittee hearing on the Small Business Administration’s 504/CDC Loan Program and the value credit unions provide to the nation’s small businesses.

Merz is testifying before the committee in today’s hearing, “A Review of SBA’s 504/CDC Loan Program,” which begins at 10 a.m. Eastern.

In her testimony, Merz discusses how her credit union actively pursues SBA 7(a), Express and 504 loans, “I believe that the SBA’s mission to promote small businesses closely resonates with any credit union’s goal to support business members in their communities.”

She will touch on credit unions’ willingness to serve small businesses and how the industry stepped up during the financial crisis to help the struggling economy. However, she will explain, the “antiquated and arbitrary member business lending cap prevents credit unions from doing more for America’s small business community.”

The member business lending (MBL) cap is particularly burdensome for 504 lenders, Merz notes. “The arbitrary cap can have its biggest impact on SBA 504 loans since the first mortgage issued by the credit union in a 504 loan is a regular commercial loan that counts toward the cap.”

During her testimony, Merz will share with the subcommittee ways to improve SBA’s 504 loan program, including exempting SBA 504 loans from counting toward the credit union MBL cap and creating more flexibility in the program.

The SBA developed the Certified Development Company (CDC)/504 Loan Program to promote economic development and create and retain jobs. Merz says the program helps financial institutions serve the needs of small-business borrowers that need financing for plant and major-equipment financing but might not meet conventional underwriting standards.

The SBA in 2016 approved 5,938 504/CDC loans amounting to roughly $4.74 billion. Merz will discuss some of the ways this program has helped her credit union meet the needs of small-business members, why it’s attractive to lenders, its challenges and recommendations for improvement.

She will also discuss the three-year memorandum of understanding that NAFCU signed with the SBA in 2015 aimed at getting more credit unions to increase their lending to member small businesses through SBA micro-loan programs.


The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to or @NAFCU on Twitter.


Molly Safreed, (NAFCU)

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