Credit unions could make more loans if the Small Business Administration streamlines its loan approval and evaluation processes and Congress raises the cap on member business loans, Corning FCU President/CEO Gary Grinnell told a House panel on Wednesday.
Grinnell, testifying on behalf of NAFCU, told the House Small Business Committee that the SBA should compare the default rate of loans made by credit unions with financial institutions that have similar loan portfolios.
"The blending of all lenders with varying portfolios to arrive at a dilutes the true picture, as one cannot compare a small SBA unsecured working capital line of credit with a large SBA loan secured with commercial real estate. Clearly the two loans are different and should have different evaluation processes. If this evaluation process is not changed, it may eventually eliminate all small loans from lenders' portfolios,'' Grinnell said.
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