Nobody can accuse small business lenders of lacking moxie.

Even as some in Congress talk about eliminating the U.S. Small Business Administration, lenders plan to aggressively push a legislative agenda to expand some of the loan programs in the face of tight federal budgets.

Just last week, Rep. Jan Meyers, R-Kan., who now heads the House Small Business Committee, promised a review of SBA programs. Even though she is said to be considering shrinking - or eliminating - the 8(a) and specialized small business investment company programs, bankers are encouraged by her appointment.

"From what we know, she's going to be supportive of SBA's programs," said Ronald Ence, director of legislative affairs with the Independent Bankers Association of America. "What we don't know is how much pressure she will be receiving from (other members of) Congress."

While Rep. Meyers has already set out her committee's agenda for the first six months of the session, the Senate Small Business Committee is in the process of reorganizing. Chairman Christopher Bond, R-Mo., is expected to unveil his agenda this week.

Meanwhile, bankers have not been waiting to put together their own legislative agendas to push with the help of trade groups.

At the IBAA, the primary goal is to make sure the SBA survives the budget ax by educating key committee members on the impact that the program has on local economies.

"There are some members of Congress who view this type of program as unnecessary," said Mr. Ence. "If you eliminate the SBA loan programs, the impact on the economy, particularly in rural areas, would be devastating."

Others are confident the program will survive and are looking at ways to get more bang from the SBA's limited bucks. The National Association of Government Guaranteed Lenders and the Consumer Bankers Association are both pushing to lower the SBA's subsidy rate.

They say that could be accomplished by increasing the guarantee fee paid on every loan, extending fees charged for maintenance of the SBA program to all loans instead of just those sold into the secondary market, and reducing the percentage of each loan the SBA can guarantee.

Saul Moskowitz, a small business consultant for the Virginia-based Consumer Bankers Association, said the group is hoping Congress will cut the subsidy rate to below 2%. It is presently 2.73%.

Tony Wilkinson, president and chief executive of the Oklahoma-based government guaranteed lenders group, is hopeful the committees will tackle these issues in the first 100 days.

"I'm hopeful we can get the subsidy rate reduced by the first of April," said Mr. Wilkinson, whose group is organizing a grass roots lobbying effort by members. "If that happens, I'm hoping the $500,000 ceiling on loans guaranteed by the SBA will be eliminated."

If successful, the effort could do more than repeal the $500,000 limit placed Jan. 1 on popular 7(a) programs. It could expand the number and dollar volume of guaranteed loans at a time when a funding squeeze has pinched available loans.

But bankers have more than the SBA on the agenda this spring. One issue is the proposal to require small business lenders to gather race and gender data on loan applications. Lenders oppose it as costly and unnecessary.

Robin Wantland, a senior vice president with Bank One Texas and head of the American Bankers Association's small business committee, said often competing needs for community reinvestment and safety and soundness considerations makes the issue a critical one for bankers.

Others - especially independent bankers - worry about big-bank efforts to repeal the Glass-Steagall Act. The IBAA's Mr. Ence said small banks believe that eroding the six-decade-old firewalls between banks and brokerages could mean new competition for deposits and a shrinkage of capital available to small companies.

Many are hoping that Congress will apply fair lending and community reinvestment requirements to brokerages and other nonbank lenders. "I think it will create fairness in the marketplace that will encourage more banks to participate in their local communities," said Mr. Moskowitz of the Consumer Bankers Association.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.