WASHINGTON—Senate Banking Committee Chairman Mike Crapo (R-ID) has offered an amendment to the Senate’s Phase 4 stimulus package, the Health, Economic Assistance; Liability Protection and Schools (HEALS) Act – that would include additional flexibility allowing the Treasury Department and Federal Reserve to take risks in emergency lending as part of efforts to stabilize the economy.
The amendment also includes an extension of relief for the NCUA’s Central Liquidity Facility (CLF) and Troubled Debt Restructurings (TDRs) through the end of 2021.
Crapo’s proposed amendment includes a provision to revise rules Congress set for $454 billion in emergency lending authority – made available to the Treasury and Fed in March – which allows the Treasury to approve loans and other investments even if it appears it may incur losses.
Additionally, the proposed amendment includes a proposal to give the Fed temporary authority during extreme circumstances to ease a set of bank capital requirements established under the Dodd-Frank Act, NAFCU noted in its analysis.
Letter Sent
Last week, Crapo wrote to the Treasury and Fed urging both to expand their Main Street Lending Program. The Fed announced in April that it would provide up to $2.3 trillion in loans to businesses, households, and state and local governments through new and expanded programs and facilities and last month announced changes to the program to allow more small and mid-sized businesses access to funds.
The Senate began releasing details of the HEALS Act last week, which includes several items related to small business lending. Among those provisions are improvements to the Paycheck Protection Program, including simplifying the forgiveness application process for smaller loans.
NAFCU Letter on CU Priorities
Separately, NAFCU's Brad Thaler has sent a letter to Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Chuck Schumer (D-NY) to share credit union priorities regarding a fiscal year 2021 spending package previously passed the House.
In the letter, Thaler, NAFCU’s vice president of legislative affairs, called on lawmakers to oppose any inclusion of a proposed amendment to create a pilot program for postal banking in the fiscal year 2021 Financial Services and General Government (FSGG) appropriations bill.
“While the underlying bill has important funding provisions, we would like to express opposition to language that was added on the House floor to create a pilot program for postal banking," wrote Thaler. "We urge you not to include this provision in any appropriations packages the Senate considers."
What’s Included
The House-passed legislation also includes funding for the Community Development Financial Institutions (CDFI) Fund and the Community Development Revolving Loan Fund (CDRLF). In the letter, Thaler also reiterated NAFCU’s call for further funding for these programs, which are used by credit unions to support low-income communities.
Currently, funding for the CDFI Fund is slightly lower than what was allocated in the House version of the FY2020 FSGG bill, but above the final enacted FY2020 amount. The CDRLF money is on par with last year.
Thaler also noted NAFCU’s support for additional CDFI funding to create a CDFI Crisis Fund that would automatically provide capital during a natural disaster or economic crisis, and a proposal to provide money to help the CDFI provide jobs and neighborhood support to enable a faster and fuller recovery. He also noted the association’s support for additional emergency funding for CDFIs, similar to the $1 billion in emergency funding that was included in the House-passed HEROES Act.