WASHINGTON (12/26/08)--Credit unions on Monday tuned into a joint audio conference on the topic of member business loans and the Small Business Administration (SBA). The event featured representatives of the National Credit Union Administration (NCUA) and SBA. The call focused on several SBA programs designed to facilitate greater small business lending, which has recently slowed in light of the current overall economy. Grady Hedgespeth, SBA's director of financial assistance, detailed an interim final rule adopted by the SBA which “uses an alternative base rate for determining the interest applied to certain SBA loans.” This interim rule has resulted in more favorable terms for lenders and is aimed at increasing lending, according to Hedgespeth. He also discussed another recently adopted rule related to weighted average coupons for formulation of pools. This rule allows the aggregation of multiple coupon rates. Frank Kressman, NCUA staff attorney in the Office of General Counsel, discussed NCUA's Member Business Lending (MBL) rule and its relation to SBA lending. The agency’s MBL rule contains collateral and security requirements, as detailed in Parts 723.3 and 723.7, which contains required loan to value (LTV) ratios per safety and soundness concerns. A few years ago, NCUA amended the MBL rule for SBA lending in order to allow CUs to more fully participate in the program, explained Kressman. Specifically, the change removed the language which previously stated that the collateral and security requirements of the MBL rules do not apply to MBLs as part of the SBA program. Kressman reiterated that the SBA 7(a) program was included. NCUA recently released an Advance Notice of Proposed Rulemaking (ANPR) to review its entire MBL rule. One of the issues includes the LTV rules for construction and development loans and whether they are appropriate or should be adjusted. To access the entire audio conference, use the resource link below.