COLUMBIA, Md.–The MD|DC Credit Union Association hosted a virtual town hall with Sen. Ben Cardin (D-MD), Maryland officials and regulators. More than 150 credit union professionals participated in the second of an ongoing series of town halls that have brought together panelists to offer support and solutions for credit unions and their members during the COVID-19 pandemic.
Among the issues discussed:
Paycheck Protection Program
Cardin called the Paycheck Protection Program a top priority and encouraged credit unions experiencing challenges with processing loan applications to reach out to his office. He stressed that the loans should be processed in days, not weeks as the program was designed to put the economy back on track by getting money out into the community quickly, the MDDCCUA reported. Cardin also said that he fully expects additional economic stimulus packages will be needed to respond to program demands and to address issues.
Cardin said he sent a letter to Treasury Secretary Mnuchin earlier in the day urging the SBA and Treasury to reserve PPP funding for Community Development Financial Institutions that have established relationships with small businesses in underserved communities that need the assistance.
Tax Relief
Sharonne Bonardi, Maryland’s deputy comptroller, applauded credit unions for proactively providing financial relief to consumers and businesses. The Comptroller’s Office has extended tax deadlines and has ceased collection efforts to ease economic distress, the MDDCCUA said. As the federal government begins distributing stimulus checks in the coming weeks, Bonardi encouraged credit unions to be on the lookout for phishing scams and fraud.
Economic Impact
Maryland Secretary of Labor Tiffany Robinson thanked credit unions for partnering with the state to help keep the economy moving forward while also protecting the health and safety of Marylanders. Robinson said the labor department has managed an unprecedented volume of unemployment claims, processing more in the month of March than in all of 2019, the MDDCCUA said.
Consumer Relief
Maryland Commissioner of Financial Regulation Tony Salazar thanked credit unions for supporting Governor Hogan’s relief initiative announced on Friday that recommends financial institutions provide up to a 90-day mortgage forbearance or deferment, waive late fees and refrain from reporting negative information to credit bureaus.
To prevent lenders from initiating foreclosures, Salazar is shutting down the state’s online foreclosure notification system per an executive order from the Governor which also raised lending limits for credit unions on a case-by-case basis to make credit more available to businesses, and suspended repossession of cars, truck, mobile homes, trailers or house boats.
NCUA
John Kutchey, NCUA regional director, Eastern Region, said the agency is conducting a brief survey to gain insight, on a state-by-state basis, of credit unions’ operational and liquidity challenges. The NCUA considers liquidity as the number one priority and is prepared to use the authority granted by section 208 of the Federal Credit Union Act, which allows the agency to put a guarantee in place for a credit union that experiences an adverse impact on their financial statements because of COVID-19. The CARES Act also makes it easier for credit unions to join the Central Liquidity Facility.
Kutchey encouraged credit unions to refer to a letter the NCUA released a few weeks ago that contains a pre-approved bylaw amendment enabling credit unions to hold virtual meetings. The bylaw must be approved by a majority of the credit union’s board of directors but does not require a membership vote. An NCUA letter released Tuesday offers analysis of the Paycheck Protection Program and affirms that lenders cannot be borrowers, the MDDCCUA said.
Workplace Guidance
John Bredehoft, attorney for Kaufman & Canoles, provided an update on the emergency paid leave provisions and family and medical leave extension of the Families First Coronavirus Act. Bredehoft advised credit unions that IRS form 7200 is now available to request an advance payment of the tax credits for qualified sick and qualified family leave wages, the MDDCCUA said.
Bredehoft further cautioned that while small businesses with fewer than 50 employees can receive an exemption from the paid leave provisions, the standards are very stringent.
“The exemption may be claimed if the leave request is to care for a child whose school or place of care has been closed or the child's care provider is unavailable due to COVID-19 related reasons; and an authorized officer of the business has determined that: granting leave would cause the business to cease operating; that the absence of an employee would jeopardize the business because of their specialized skills, knowledge or responsibilities; or the business would be left with an insufficient number of able, willing and qualified workers,” the MDDCCUA quoted Bredehoft as saying.
Bredehoft added that businesses must retain leave documentation for four years.