CUNA Comment Letter

SBA 7(a) Loan Program

November 09, 2007

Ms. Gail Hepler
Chief 7A Loan Policy Branch
Office of Financial Assistance
Small Business Administration
409 3rd Street, SW
Suite 8300 Washington, DC 20416

Dear Ms. Hepler:

This letter represents the views of the Credit Union National Association (CUNA) regarding the Small Business Administration’s request for comments on data collection to assist the agency in its assessment of possible changes to the application process for the SBA 7(a) loan program for loans of $350,000 or less. By way of background, CUNA represents approximately 90% of our nation’s 8,400 state and federal credit unions, which serve nearly 87 million members.

CUNA supports the agency’s efforts to improve the 7(a) loan application process including its current focus on smaller loans. Ensuring the agency’s modifying the process in the most effective and efficient manner will entail soliciting information from lenders, which we support as long as information requests are reasonable and not burdensome to provide for either lenders or borrowers. In the future, providing more details about the specific information to be collected would facilitate more useful comments.

The request for comments mentioned SBA Form 4 (borrower’s application) and Form 4-1 (lender’s application for guarantee or participation). Some of our members have raised the concern that these forms largely duplicate information lenders collect on their own forms. We encourage the SBA to consider how this information could be consolidated and redundancies eliminated, including whether there could be greater reliance on the use of data provided on lenders’ forms.

In September, the agency announced a new Rural Lender Advantage Program, which provides a simplified application for loans of $350,000 or less in rural communities. This is an admirable step, which we commended at the time of the announcement. We encourage the agency to consider the extent to which the streamlined characteristics of this program could be applied to other 7(a) loans, particularly those which do not exceed $350,000.

We also note that 44 credit unions are already participating in the SBA’s new Patriot Express Loan initiative announced in June to support veterans and Reserve members by providing favorable guaranty and interest rate characteristics for loans up to $500,000. This is an important program, and we want to work with SBA as well as the National Credit Union Administration to support credit union involvement.

CUNA and credit unions are encouraged by the efforts under SBA Administrator Steven Preston to improve the 7(a) program. Such initiatives not only facilitate the ability of more small businesses to pursue their dreams but also enhance the capabilities of credit unions and other lenders to support small businesses and their communities.

Thank you for the opportunity to share our views; please contact me if you have questions or would like more information about out comments.

Sincerely,

Mary Mitchell Dunn
Deputy General Counsel and
Senior Vice President

Cc: SBA Administrator Steven Preston