ARLINGTON, Va.–There is considerable uncertainty in Congress, including on when the House will officially reconvene, as a result of the ongoing pandemic, and that has left credit unions having to deal with a fluid situation on Capitol Hill.
Among the issues over which there is a disagreement: whether there is a need for a fourth stimulus package.
“We are as divided as we have ever been,” said Carrie Hunt, NAFCU’s EVP and general counsel. “The House still feels there is a need for more measures, while the Senate is more cautious. We are concerned with anything that would affect credit unions.”
The kinds of measures that might affect credit unions, said Hunt, are proposals that have previously been discussed, such as new laws curtailing overdraft fees or requiring credit unions to cash stimulus checks for non-members.
As CUToday.info reported here, several new bills are now before Congress that would provide temporary exemptions from the MBL cap and that would clarify aspects of the Paycheck Protection Program (PPP).
Hunt said she is not surprised to see demand for loans through the second round of the PPP has cooled, explaining all of the reporting around problems and issues in the first round of funding helped to tamp down response. In addition, reports that some large, public companies were returning funds also led to additional caution.
Focus on Capital, Exam Scrutiny
Meanwhile, although NCUA has made a number of changes credit unions have been requesting in response to the pandemic, Hunt said NAFCU remains focused on having the agency make adjustments on capital and that it move to not penalize credit unions during exams for their various responses to the deep economic downturn. Lagging loan demand and reduced interchange is already hitting credit unions’ pocketbooks, and the uncertainty over the congressional agenda is matched by a similar uncertainty over what’s ahead for credit unions in the remainder of 2020 and 2021.
“That is the big question,” said Hunt. “No one can predict. But credit unions are well-capitalized. Credit unions will serve their members. That’s what they’re here for.”
NCUA’s Hood to Testify
Separately, the Senate Banking Committee is holding a hearing today with NCUA Chairman Rodney Hood slated to testify.
The hearing will focus on regulators' efforts to provide financial institutions with relief and resources amid the coronavirus pandemic.
A livestream of the virtual hearing will be available on the committee's website.
In addition to Hood, representatives from the Federal Reserve, Office of the Comptroller of the Currency, and FDIC will also be testifying.
The hearing is set to begin at 10 a.m. ET.