RELEASE: Hill, Luetkemeyer Urge SBA to Stop Its Ineffective Direct Lending Efforts
WASHINGTON, D.C., November 17, 2021
Today, Rep. French Hill (AR-02), Ranking Member of the Subcommittee on Housing, Community Development, and Insurance on the Financial Services Committee and Congressman Blaine Luetkemeyer (MO-03), Ranking Member of the House Small Business Committee and Consumer Protections and Financial institutions Subcommittee, sent a letter to Small Business Administration (SBA) Administrator Isabel Guzman urging the SBA to stop its direct lending efforts to allow the private sector lenders to do their job.
In the letter, Rep. Hill and Rep. Luetkemeyer write, “Small businesses that participate in the program benefit from the efficiencies, expertise, and prudent underwriting of private sector lenders. Having the federal government operate as a direct lender through the SBA would crowd out the private market and compete with community banks and other financial institutions that already work in public-private partnerships. The SBA should focus on improving its existing programs and incentivizing financial institutions to participate as lenders instead of expanding its own footprint.”
The members continued, “Allowing the SBA to operate as a direct lender would invite even more fraud and abuse, ignoring why repeated attempts at direct government lending have failed. Private sector lenders, that must adhere to federal financial regulations, far exceed oversight controls to protect and safeguard American taxpayer dollars as compared to a federal agency.”
For the full letter click HERE.