2014 brings both challenges and opportunities to the CDC industry. On the challenge side it is clear that the demise of the nation’s second largest CDC is having ripple effects that will course through our industry driving substantial policy changes and altering the perception of our partner and regulator – SBA. It appears we will finally get the oversight that we have been asking for for years and most likely more than we asked for. It is critical that NADCO voice strong support for "cleaning up the industry” through vigorous enforcement of SBA regulations and at the same time ensure that the new standards that SBA seeks to implement are achievable for most of our CDCs. In other words we must both eliminate the bad behavior (and players potentially) while stepping up our efforts to significantly improve the industry in its governance, lending and internal controls capacity. Hopefully this will return us to a Back to The Future scenario wherein NADCO and CDCs with capabilities and resources will work to raise all boats with training and capacity building. This is an opportunity. Also on the opportunity side is the prospect of a permanent SBA 504 Debt Refi program along with some other important program changes.
However, there are more fundamental questions regarding the future of the CDC industry that we must start to address in 2014 if we are to regain the trust and support of the SBA, Congress, our lending partners and even the general public. And this goes to the core of our existence. We must rediscover, restate or probably reinvent our core purpose and values – our reason for being. Once upon a time, CDCs or their precursor LDCs were clearly focused on local economic development – on being a resource, a catalyst, a partner to our local governments, small business and economic and community development organizations. Of particular concern and focus was serving areas and populations that were disenfranchised for one reason or another. While we cannot go back to that time, it is imperative we can articulate and implement a purpose and strategy that we are passionate about and that captures the enthusiasm and support of all our stakeholders and that fits where we are and where we want to go.
That is our greatest challenge and opportunity for 2014 and beyond.
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