Sens. Cardin, Ernst share NAFCU’s concerns on SBA lending proposed rules
Senate Small Business and Entrepreneurship Committee Chairman Ben Cardin, D-Md., and Ranking Member Joni Ernst, R-Iowa, wrote to the Small Business Administration (SBA) this week to express major concerns on two proposed rules issued by the agency to change regulations governing SBA’s 7(a) Loan Program and 504 Loan Program, and to allow fintech lenders to offer 7(a) loans.
“The sweeping changes contained in these two rules would substantially overhaul SBA’s lending programs by permitting new program participants and changing the current guardrails of the programs, something that comes dangerously close to authorizing through the regulatory process,” stated the lawmakers in their press release.
Cardin and Ernst also noted that “Congress has not authorized any loosening of prudent underwriting on affiliation standards.”
NAFCU shared similar concerns with the proposed rules, warning the SBA that “the simultaneous loosening of lending requirements and opening 7(a) lending to underregulated, fraud-prone fintechs would represent a major shift in SBA lending, the impacts of which may be significant, and which have not been properly examined.”
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