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One Credit Union Finds Small Biz Lending Model Unsustainable

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April 23, 2013

By Bob Coleman
Editor, Coleman Report

AmericanEagleFCUWith a small business loan portfolio capped at 12.25% of assets, credit unions are lobbying Congress hard to increase this limit.

But for American Eagle FCU out of Connecticut they are throwing in the towel.

The credit union has decided the cost of building an infrastructure with underwriters, servicers and backroom technology would be too great to do the job correctly.

With $1.4 billion in assets, American Eagle has room to grow its $33.7 million portfolio, but the hard cap limit is $170 million.

It’s interesting to note the credit union has chosen not to participate in the SBA 7(a) lending program. That could have solved its scalability concerns.

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