WASHINGTON—NAFCU told the Small Business Administration (SBA) in a letter to the agency it supports proposed rulemaking to streamline and modernize its Certified Development Company (CDC) program corporate governance requirements.
"The proposed rule will streamline and update the operational and organizational requirements for CDCs, likely bolstering 504 lending to credit union members. Reducing regulatory burdens on CDCs will allow more opportunities to focus on growth and providing financing," wrote NAFCU Regulatory Affairs Counsel Kaley Schafer.
CDCs provide financing for 504 loans along with third-party lenders. Although credit unions are not classified as CDCs and are therefore not directly impacted by the proposal, a majority of association member credit unions that participate in SBA lending programs offer 504 loans as third-party lenders, NAFCU said.
Schafer also noted that NAFCU members report increased demand for business lending over the past year, demonstrating that a credit union member's access to affordable small business lending programs "ensures our local communities continue to thrive, promote innovation, and provide jobs."
In addition, there are a number of similarities between the credit unions and small business lending programs.
"Just as the SBA's loan programs were designed to provide lending to small businesses that might not otherwise obtain financing, credit unions were similarly designed to provide provident credit to individuals and small businesses that might not otherwise have the means to obtain it," she said.