WASHINGTON–A wide number of constituencies, including members of Congress, are now digging into the 880-page, $2-trillion Coronavirus Aid, Relief and Economic Security Act (CARES Act, S.3548) passed by the Senate to determine how the exact language actually reads and how to sort the winners and losers. The legislation is supposed to be voted on in the House today.
One winner: the nation’s smaller banks. The banks were successful in winning a provision that would allow those banks to have lower requirements for capital reserves. As the New York Times reported, the industry in 2019 had fought for the change but lost in Congress.
“This time the banks used the disaster to reopen the fight and get the lower capital requirements they wanted, arguing that it would allow them to do more lending to small businesses during the coronavirus emergency,” the Times reported. “The change would remain in effect as long as the virus emergency continued, although the industry is already discussing looking for ways to make it permanent.”
CU Response
As CUToday.info reported here, credit unions were initially supportive of the legislation in the hours after it was passed by the Senate, although NAFCU CEO Dan Berger said there is “no doubt that other provisions in this legislation will prove difficult for some credit unions to implement.”
Another winner: for-profit colleges, which were successful in getting a provision that would allow all colleges to retain federal funds allocated to help educate qualifying students, even if the students in question dropped out because of coronavirus-related emergencies. While the provision applies to all colleges, critics of for-profit colleges contend that, because those schools tend to have higher dropout rates, they would be able to retain more of the money they collect via federal loans to their students than would traditional nonprofit colleges, noted the Times.