WASHINGTON–Credit unions and their trade groups are busy parsing through the $900-billion COVID stimulus package now before Congress as CUs prepare for a new influx of deposits from members and applications from businesses for another round of Paycheck Protection Program (PPP) loans.
While changes to the provisions could still occur, the legislation includes $600 direct payments to many Americans and an additional unemployment benefit of $300 per week for those who qualify.
CUNA’s chief advocacy officer, Ryan Donovan, noted Congress will remain in session until several major pieces of legislation are completed, including the COVID-related bill and the omnibus appropriations bill that keeps the government running.
“There is a great deal of good news” in the legislation, said Donovan, adding there had been a “great deal of advocacy work by CUNA and state CU leagues” in the lead-up to the COVID bill. “We think these provisions at least will allow credit unions to serve their member as we remain in this crisis and emerge from the crisis,” he said.
Provisions for Which NAFCU Has Advocated
Similarly, Carrie Hunt, EVP and general counsel with NAFCU, called passage of the legislation a “positive” as it includes numerous provisions for which NAFCU has also advocated.
Hunt said NAFCU and its member credit unions do remain concerned over the influx of deposits from the stimulus checks that will put pressure on capital at some CUs. For that reason she said NAFCU was pleased with last week’s NCUA board meeting where the agency indicated it will provide “flexibility” for credit unions experiencing such pressures.
Similarly, Hunt said NAFCU continues to be watchful of any indication a premium may need to be assessed to bolster the NCUSIF’s normal operating level, another issue that was discussed at that same board meeting.
“We do not think there should be a premium based on members depositing these checks,” she said.
The bill includes $248 billion in additional funding for the PPP, as well as a loan forgiveness simplification process that had the support of both CUNA and NAFCU.
Hunt said NAFCU continues to hear from credit unions interested in making additional PPP loans and that it also is working to get more clarity on a technical issue related to small business owners who have applied for a PPP loan after having already been approved for an Economic Injury Disaster Loan (EIDL).
Additional Provisions
In addition, the new COVID relief legislation also includes $12 billion for CDFIs, $9 billion of which is for long-term capital and $3 billion of which is for grants and technical assistance; a one-year extension of expanded Central Liquidity Facility and troubled debt restructuring (TDR) provisions included in the CARES Act, and an “expanded and improved” employee retention tax credit will include both state and FCUs, as well as $25 billion in rental assistance.
As the last days of the current Congress come to a close, Donovan noted CUNA remains engaged regarding the status of the National Defense Authorization Act (NDAA), which has been passed by Congress but which President Trump has threatened to veto. The president has until Dec. 23 to sign the bill into law or to veto it. Should he veto the bill, Congress would likely return to Washington and look to override the veto.