WASHINGTON–Even as the credit union trade groups continue to dig through the more-than-$2-trillion economic rescue package passed by Congress late last week, many in Congress and elsewhere in Washington are now considering a fourth economic package, with some suggesting it could be even larger than the last as the coronavirus pandemic wreaks havoc with the economy.
“This is certainly not the end of our work here in Congress—rather the end of the beginning,” said Senate Minority Leader Chuck Schumer (D-NY).
The goal, according to at least some, is to avoid a "21st Century Depression." But some analysts in Washington have suggested that as the components of the CARES Act become clearer, and as some companies profit from it while others do not, there will be less of an appetite for another rescue bill, according to the Wall Street Journal.
Should another economic rescue plan be passed by Congress its components are likely to include an extension of unemployment benefits, funds for state budgets and an overall transition from stabilization to stimulus.
As CUToday.info has reported, phase one was enacted on March 3 and provided $8.3 billion in funds for health agencies and testing, and for small-business loan subsidies. Phase two, signed into law on March 18, March 18, included approximately $100 billion in tax credits for employers offering paid sick leave, and increases to unemployment benefits and food assistance. Phase three is the $2-trillion package signed into law last week that includes checks to households, bailouts for airlines and other distressed industries, and loans and grants for small business.
While Congress continues to debate what will be included in phase four, the credit union trade groups and NCUA are offering their responses to the $2-trillion CARES Act.
CUNA Response
CUNA noted the bill was amended to include credit unions in several provisions that, “through drafting oversights, had previously only included banks and other lenders in provisions meant to support and protect consumer finances.”
“This bill is vital to ensuring credit unions can continue to offer services that ensure consumers remain financially healthy amid the rippling effects of the COVID-19 pandemic,” said CUNA President/CEO Jim Nussle in statement. “We thank legislators for recognizing our concerns and we look forward to applying these provisions across our essential service industry. America’s credit unions are putting their people-over-profit model to work to help keep communities financially secure during these uncertain times.”
CUNA noted CU provisions in the bill include language:
- Making credit unions eligible to participate in the paycheck protection program, which would allow for 100% federally guaranteed loans to small businesses that maintain their payroll
- Reestablishing the Transaction Account Guarantee Program, in which the government guarantees certain noninterest-bearing transaction accounts
- Including credit unions in troubled debt restructuring, allowing credit unions to further modify existing loans;
- Expanding NCUA’s Central Liquidity Facility (CLF), which serves as a liquidity lender to credit unions experiencing unusual or unexpected liquidity shortfalls; and
- Including credit unions in a current expected credit loss (CECL) delay for those entities currently required to comply with CECL.
NAFCU Response
In response to passage of the bill, NAFCU CEO Dan Berger said, ““We appreciate Congress and the administration acting swiftly to enact relief legislation as we face one of the worst pandemics in over 100 years. As lawmakers consider additional reforms, NAFCU is going to make sure credit unions' needs are heard, as they must receive greater flexibility and relief so that they can serve their members and help the country out of the economic difficulty posed by COVID-19.
NCUA Response
NCUA Chairman Rodney Hood responded to passage of the stimulus bill by saying,“The Coronavirus Aid, Relief and Economic Security Act provides vital economic support and regulatory relief, and will ensure that credit unions play a critical role in the economic recovery following the coronavirus outbreak.
“Most importantly, the act provides the NCUA Board with the power to expand access to and increase the borrowing authority for the Central Liquidity Facility. This will enhance its role as a liquidity backstop for the credit union system.
“Furthermore, the act allows credit unions to provide guaranteed loans to businesses and self-employed individuals through the U.S. Small Business Administration’s paycheck protection program. This will permit credit unions to assist members with payroll, benefits, and other eligible expenses.
“The act provides the NCUA Board with the ability to increase share insurance coverage for noninterest-bearing transaction accounts. I look forward to working with my fellow board members to provide additional coverage for credit union members with applicable accounts that have balances above the current limit of $250,000.
“The act offers relief from accounting requirements and impairments resulting from loan modifications for borrowers affected by the coronavirus pandemic. I am also pleased that Congress provided temporary relief from the implementation of the Financial Accounting Standards Board’s current expected credit losses methodology.”