CUNA brings immediate CU concerns to Congressional cmte leaders

March 19, 2020

CUNA wrote to leaders of the Senate Banking Committee and House Financial Services Committee Thursday with information on credit unions’ response to the coronavirus disease (COVID-19) outbreak, and including a number of suggestions to help increase member service.

Sen. Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee, and Rep. Maxine Waters (D-Calif.) this week echoed CUNA’s call for a moratorium on federal regulator rulemakings unless specifically designed to provide COVID-19 relief.

CUNA is in regular contact with its member credit unions, and notes in its letter that it is currently surveying members to better understand how they are planning during the outbreak.

The survey has also shown credit unions have three immediate concerns:

  • Credit unions in certain parts of the country have seen an increased demand of cash, and as the safest place for people to keep their money is in an insured financial institution, CUNA asked government leaders to do more to assure depositors that their deposits in credit unions and banks are federally insured;
  • Credit unions have expressed some concern with plans to distribute checks to Americans. The concern does not have to do with the dispersal of funds, but rather in the method those funds may be dispersed. The concern is that if the government issues millions of checks, recipients will flood credit unions and banks to deposit these checks, putting themselves and financial institution employees at undue risk. CUNA urges the government to consider disbursement alternatives that do not encourage recipients to violate the public health recommendations under which many are currently living; and
  • Some credit unions have seen an uptick in cyberattacks and financial elder abuse and have communicated to their staff and member on how to protect personal data, raising awareness of phishing scams, and how to recognize scams of the elderly. It is important for leaders in government to raise awareness of these scams and work to prevent them, CUNA notes.

The letter also highlights CUNA’s letters to NCUA and the Consumer Financial Protection Bureau with relief suggestions, and calls on Congress to:

  • Enact legislation exempting credit union business loans made during federally declared disasters and emergencies from the Credit Union Member Business Lending Cap;
  • Enact legislation to exempt fully government-guaranteed loans made through programs at the Small Business Administration, Department of Agriculture and other agencies from the Credit Union Member Business Lending Cap;
  • Ensure that any new small business lending programs created through the Small Business Administration or other government agencies include an opportunity for credit unions to participate; and
  • Increase appropriations for the Community Development Financial Institution Fund (CDFIF), the Community Development Revolving Loan Fund (CDRLF), and the Community Development Financial Institutions (CDFI) Fund.

CUNA also asked Congress to consider permitting corporate credit unions to serve as agents for credit union access to NCUA’s Central Liquidity Facility (CLF), as CUNA anticipates that as the crisis persists credit unions will need to be able to efficiently access additional liquidity sources.

The letter also reiterated calls for a delay in the current expected credit loss (CECL) implementation, and for relief from the Regulation D account transfer limit.