Reps. Brad Sherman (D-Calif.) announced a bill Friday to exempt credit union business loans related to the pandemic from the member business lending cap for one year. Sens. Ron Wyden (D-Ore.) also announced he will introduce a Senate companion bill next week.
The House is expected to return to session as early as next week to continue work on the next phase of COVID-19 relief legislation, and CUNA and Leagues have called for such an MBL exemption to be included in the package.
“Businesses and communities around the country are facing economic hardships that haven’t been seen in generations, and this bill will help credit unions deploy much needed capital to those businesses,” said CUNA President/CEO Jim Nussle. “Credit unions have served as financial first responders since the onset of the pandemic and will be vital to the nation’s recovery efforts. These bills will bolster those efforts going forward, and are a much needed solution that will leverage the strong relationships that credit unions have in their communities to help Main Street recover and rebuild from this crisis."
Reps. Don Young (R-Alaska), Brian Fitzpatrick (R-Pa.), Maxine Waters (D-Calif.), Suzanne Bonamici (D-Ore.), Vicente Gonzalez (D-Texas), Eleanor Holmes Norton (D-D.C.), Joe Neguse (D-Colo.), J. Luis Correa (D-Calif.), Alan Lowenthal (D-Calif.), Jeff Van Drew (R-N.J.) and David Trone (D-Md.) co-sponsored the House bill.
Specifically, the legislation would exempt loans made during the declared COVID-19 disaster from the member business lending cap (12.25% of assets) until one year after the end of the COVID-19 emergency declaration.
As many small businesses have been coping with the financial effects of the pandemic, credit unions have been hard at work to aid extend access to capital, both in providing individualized support products and facilitating access to the Paycheck Protection Program (PPP). Rep. Sherman’s legislation would allow credit unions to continue to support these Main Street employers well after the PPP has run its course.