WASHINGTON–The Senate has approved an approximately $484 billion relief package that includes another $310 billion for the Paycheck Protection Program (PPP), with $60 billion of the funds set aside for community lenders, for which both credit union trade groups had been advocating.
That $60-billion is to be divided with $30 billion for loans made by insured depository institutions with between $10 billon and $50 billion in assets, and $30 billion for loans made by institutions with assets of less than $10 billion.
The new spending package also includes funds for hospitals and expanded COVID-19 testing.
Earlier in the day, Sen. Chuck Schumer (D-NY) had said $125 billion will be sent "exclusively to the unbanked, to the minorities, to the rural areas, and to all of those little mom and pop stores that don't have a good banking connection and need the help.”
Access by the so-called mom-and-pop stores to PPP funds has been among the loudest of criticisms of the program, which went through its original $349 billion in funds in less than two weeks and with many large, profitable companies accessing funds ahead of smaller firms. Although the PPP is supposed to provide funds to cover salaries at firms of 500 employees or fewer, loopholes in the rules allowed companies with fewer than that number “per location” to receive billions.
The bill still needs to go to the House for a vote before it can go to the president for his signature. President Trump has already tweeted he supports the legislation.
NAFCU Response
In response, NAFCU CEO Dan Berger said, “We thank the Senate for swiftly passing legislation to replenish the SBA’s payment protection program. These funds will go a long way toward ensuring America’s small businesses and communities receive the financial support they need to rise above the economic challenges presented by the coronavirus pandemic.
“We also thank lawmakers for listening to credit unions concerns, and setting aside a portion of the funds to be lent by credit unions and other community lenders,” Berger continued. “Credit unions are deeply involved in serving our nation’s smallest businesses and many underserved communities, and this bill will ensure funding gets into the hands of those who need it most. We look forward to the House of Representatives acting quickly to pass this legislation and making these funds publicly available as soon as possible.”
CUNA Response
In response, CUNA CEO Jim Nussle said, “At a time where small businesses across the country are struggling to remain afloat, this important legislation will ensure that hard working men and women across the country will be able to remain financially secure in spite of this pandemic. Since the passage of the CARES Act, credit unions across America have been diligently connecting small business owners with these crucial funds, and this bill will allow them to continue in that service. We urge the House to pass the bill quickly so these funds can get to work helping our small businesses through this unprecedented emergency.”