President Donald Trump signed the government funding package Friday, avoiding a government shutdown by funding the federal government to Sept. 30, 2020. The two bill package also contains funding for several credit union priorities and report language CUNA and the Leagues strongly support.

CUNA President/CEO Jim Nussle wrote House and Senate leadership expressing support for the package.

Specifically, the funding agreement passed contains two bills that together cover all 12 appropriations bills. The package includes several tax provisions, including one repealing the 21% unrelated business income tax (UBIT) on certain employee fringe benefits. CUNA and the Leagues have pushed for the repeal of UBIT since it was enacted in the Tax Cuts and Jobs Act of 2017.

Other tax provisions of interest to credit unions include:

• Eliminate the requirement for most financial institutions (including credit unions) to file an IRS Form 1099-C ("Discharge of Indebtedness") on a mortgage default involving an individual's primary residence. It would also allow the taxpayer to treat certain mortgage insurance as qualified residence interest through 2020; and
• Extending through 2020 a tax exclusion of up to $2 million for certain cancelled mortgage debt income.

Credit union funds addressed in the package include:

• Extending the National Flood Insurance Program through Sept. 30, 2020;
• $262 million for the Treasury’s Community Development Financial Institutions (CDFI) Fund, a $12 million increase from last year. CUNA wrote Congressional appropriators several times in recent months calling for funding the to CDFI Fund. The fund gives grants and awards to certified CDFIs. As of Nov. 18, 290 of 1,085 certified CDFIs are credit unions;
• $1.5 million to NCUA’s Community Development Revolving Loan Fund, a $500,000 decrease from last year. The fund was set at zero in the Senate bill but CUNA lobbied for a restoration of funding;
• $30 billion cap for the Small Business Administration’s 7(a) program, which allows the government to guarantee up to 85% of a loan, and the guaranteed portion does not count against a credit union’s member business lending cap;
• $7.5 billion for SBA’s 504 loan program, used for long-term, fixed-rate financing on major fixed assets, such as equipment and real estate;
• $17 million for the Cooperative Development Program, a $5 million increase from last year. CUNA and the World Council of Credit Unions strongly lobbied for this increase.

Report language in the legislation includes a section directing federal financial regulators to conduct a study on the need, if any, for changes to regulatory capital requirements necessitated by the current expected credit loss (CECL) standard, to be submitted within 270 days.

Additional details on the funding package can be found at CUNA’s Removing Barriers Blog.