ICBA strongly opposes opening 7(a) SBA program to fintechs

ICBA expressed strong opposition to a Small Business Administration final rule that undermines its 7(a) loan program.

New Rule: The SBA rule lifts the moratorium on the number of non-federally regulated institutions, including nonbank fintech companies, that can make loans under the 7(a) program.

ICBA Opposition: In a national news release, ICBA President and CEO Rebeca Romero Rainey said the final rule would unintentionally harm the very borrowers the SBA is trying to aid, noting ICBA’s opposition in a recent comment letter to the SBA and joint letters to the agency and Congress.

Congressional Opposition: Romero Rainey also cited a recent joint letter from members of Congress, who told the SBA that the rule establishes broad and sweeping changes that do not reflect congressional input or authorization.

Next: Romero Rainey said the SBA should instead focus on maximizing the community bank partnerships that have expanded lending in underserved areas. “ICBA will continue working to address this troubling final rule to ensure the SBA 7(a) program continues to support small businesses in local communities while preserving safeguards against fraud and abuse,” she said.