Let it stand and issue hat (7)
I believe the answer is:
stetson
'hat' is the definition.
(Stetson is an example)
'let it stand and issue' is the wordplay.
'let it stand' becomes 'stet' (I've seen this before).
'and' is a charade indicator (letters next to each other).
'issue' becomes 'son' (issue can mean someone's offspring).
'stet'+'son'='STETSON'
(Other definitions for stetson that I've seen before include "Large hat" , "Capital investment" , "St Neots (anag.)" , "Hat with wide brim and high crown, maybe a cowboy's" , "Tip" .)