SBA 7(a) Loan Program Alert from NAGGL
From: NAGGL
ATTN: SBA Lenders
RE: Want to see a Reduction of SBA 7(a) Program Fees? Then NOW is the time to take action.
A Unique Opportunity
Thanks to unprecedented grassroots support from the SBA lending industry in Campaign Inform 2001, NAGGL has won the battle
against fee increases to the 7(a) program for FY 02. And now that victory has provided the 7(a) industry with a unique opportunity.
With the support of 7(a) program participants, NAGGL has been working with both houses of Congress to see that the Office of Management
and Budget (OMB) calculates a fair and accurate subsidy rate for the 7(a) program - and we have made real progress. As a result, it may
be possible to reduce the 50 basis point lender fee and increase the size of loans considered as "small loans" from $150,000
to $250,000. But to do this, WE NEED THE IMMEDIATE HELP OF EVERY 7(a) PROGRAM PARTICIPANT.
What Can You Do?
- Because we need to get this message out and gauge the response of Congressmen as quickly as possible, phone calls are the best way to
make your contacts. So please call both your U.S. Senators and your House Representative and encourage them to support the
reduction of 7(a) program fees. Many elected officials are back home for the August congressional recess, so try contacting both their Washington,
DC and local offices. To find your elected officials’ phone numbers, go to NAGGL’s Legislative Action Center at
http://capwiz.com/naggl/home, enter your zip code under "Elected Officials," and
click "Go."
- There are several key Congressmen whose support would be particularly important in getting a fee reduction passed. For a list of these,
please see the attachment to this Legislative Alert. If you live in the district or state of any of these
Congressmen, you can have a direct influence on them - but you don’t have to live there to have an impact. Even if your member is not on
the list of key Congressmen, your own elected officials must hear from you on this issue! You can make just as big an impact by contacting
your Congressmen and encouraging them to phone the House and Senate Small Business Committees, as well as other key Congressmen, in
support of 7(a) program fee reductions.
- Contact NAGGL to let us know that your phone calls have been made, and how they have gone - whether good or bad. It is crucial
that we know who has been contacted, and how often, so that we can properly concentrate our own lobbying efforts in the right direction.
Please call Tony Wilkinson or Karen High at 405-377-4022 or e-mail them at twilkinson@naggl.com or
khigh@ naggl.com as soon as your contacts have been made, being sure to provide the following information:
your name and contact information; what officials you have contacted (name, district, state); the meeting format (phone, in person, etc.); what their
responses were; whether they pledged support, and/or which other Congressional offices they have called or committed to calling.
- Forward this message to your employees, colleagues, and borrowers, and encourage them to make contacts today to let their elected
officials know it’s time to reduce program fees. Then encourage them to follow up with NAGGL after making these contacts.
What Should You Say?
Following are a list of talking points you can use in your correspondence with elected officials:
- The Administration’s Fiscal Year 2002 budget submission shows that the SBA 7(a) program participants have paid almost $1.3 billion in excess
fees since 1992.
- Based on recent information that the General Accounting Office (GAO) provided, the excess fees paid by 7(a) program participants on loans
made from 1992 through 2001 will likely increase from $1.8 to $2.0 billion.
- Excess fees are the same thing as a tax!
- These excessive fees, or taxes, are a result of overly conservative default estimates used by the OMB. For example, OMB uses a default
estimate for FY 01 loans of 13.87%. But based on statistical data, GAO rebuts this, saying that average defaults are 8.81% on loans originated after
1991.
- As a result, 7(a) program participants are subsidizing the federal government. OMB, in effect, has been levying an unauthorized tax.
- It is time to REDUCE FEES on SBA 7(a) program participants. The SBA 7(a) program should not be run at a profit to the federal government.
Now is the Time
The success of this legislative effort will depend fully on how actively 7(a) program participants pursue it, and it is not likely that another opportunity
of this kind will arise in the foreseeable future. So please make this effort a top priority over the next few weeks. If it is successful, the benefits will
last much longer than that. Thank you for your help in this critical time.
Sincerely,
Anthony R. Wilkinson
NAGGL President & CEO
Full Legislative Alert with list of Key Congressmen & Phone Numbers - PDF format
PDF files require Adobe's Acrobat Reader. If you don't have this program, you may download it free by clicking on the Acrobat Reader icon below.
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