In a comment letter today, the American Bankers Association recommended that the Small Business Administration reconsider several elements of changes to its Express loan offerings, part of its popular 7(a) program. “While this proposed rule is well-intentioned, it falls short in several areas to uphold the SBA’s mission statement,” ABA said. “Significant revisions must be made to ensure continued access to capital for small businesses and consistent standards for our nation’s lenders.”
Specifically, ABA urged the SBA to reconsider its proposed revisions to the “personal resource” test, which would require significant additional compliance expenses for lenders; to reconsider a one-size-fits-all fee cap that ABA suggested would make Express loans less attractive to lenders; and to withdraw its proposed reforms to the agency’s principles of affiliation. ABA also raised concerns about how the proposal would treat 7(a) loans purchased from the FDIC, noting that the proposed revision would disincentivize SBA lenders from buying FDIC-owned 7(a) loans.