WASHINGTON—CARES Act provisions providing Troubled Debt Restructuring (TDR) and Central Liquidity Facility (CLF) relief will expire Dec. 31 and should be extended, CUNA wrote to the House Financial Services Committee. Separately, NAFCU is calling on the CFPB to provide more flexibility as the result of virtual markets.
In its letter, CUNA noted the CARES Act expanded the borrowing authority of NCUA’s CLF to 16 times the paid in capital (up from 12 times).
“We urge Congress to expand the CLF’s borrowing authority to 25 times the paid in capital, extend the expanded borrowing authority until Dec. 31, 2021, and to make permanent the ability of corporate credit unions to act as agents for credit unions,” CUNA’s letter reads, adding that Congress should take steps to ensure the long-term viability of the CLF.
The CARES Act also exempts certain COVID-related loan modifications from TDR treatment.
“Credit unions want to help as many Americans as possible. Under the CARES Act, credit unions are required to treat members with federally backed loans in a certain way, and they have been doing that. But it’s critically important to extend that same accommodation to other borrowers who need it,” the letter reads. “We need consistency in how consumers are treated. Therefore, we urge Congress to extend the CARES Act’s temporary TDR relief for an additional year, until the end of 2021.”
Input on PPP
CUNA also shared comments on the implementation of the Paycheck Protection Program, including:
- Expressing concerns about the loan forgiveness process and loan necessity questionnaires
- Urging Congress to pass PPP forgiveness legislation that has been proposed in the House and Senate
- Calling on Congress to enact “commonsense liability protections” for PPP lenders.
NAFCU Urges More Flexibility
Separately, in Arlington, Va. —NAFCU said in response to the CFPB's request for information (RFI) regarding the Equal Credit Opportunity Act (ECOA) and Regulation B, the Bureau should provide additional clarity and flexibility in efforts to "address today's virtual market for financial services and help improve the efficacy of such outreach."
The RFI seeks to gather information on opportunities to develop viable solutions to regulatory compliance challenges, among other things, under the ECOA and Regulation B. Of note, the RFI was issued in lieu of a symposium on these issues, NAFCU pointed out.
In the letter, NAFCU Senior Counsel for Research and Policy Andrew Morris shared credit unions' commitment to promoting financial health and access to credit within underserved and low- and moderate-income communities, highlighting credit unions' support of fair lending protections.
"NAFCU supports efforts to detect and eliminate discrimination in all forms, and additional regulatory clarification will serve to modernize and preserve the Bureau’s oversight of fair lending standards," wrote Morris.
In regard to language access and disparate impact, NAFCU suggested that focused clarification of regulatory expectations would give credit unions greater certainty that good faith efforts to help members would not trigger unintended compliance risks.
Additionally, NAFCU recommended that the Bureau work with digital advertisers and credit unions to "facilitate the efficient deployment of affirmative advertising programs, which are impeded when advertising platforms adopt overly restrictive geotargeting policies due to perceived regulatory risk. "
Costs Should Be Considered
As for future amendments to the ECOA, including the implementation of section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, NAFCU asked the Bureau to consider whether the costs of instituting extensive small business data collection requirements will be worth small improvements in supervisory data.
"Credit unions are committed small business lenders, but many lack the capacity to implement new compliance systems, particularly those with minimal business loan volume and staffing arrangements that may involve only a single employee handling business credit applications," noted Morris.
Morris further urged the CFPB to extend the timeline of its section 1071 rulemaking to "ensure that a robust cost-benefit can be performed at the appropriate time—namely, when there is greater confidence regarding how the economy has changed in response to the pandemic."