Add’l PPP guidance, CLF changes needed to support recovery

June 30, 2020

The pandemic response from the Treasury and Federal Reserve has helped stabilize the economy, but additional actions could continue to help individuals and businesses, CUNA wrote to House Financial Services Committee leadership Wednesday. The committee conducted a hearing examining the Treasury and Fed response to the pandemic.

CUNA strongly supports the Fed’s action to remove the account transfer limit under Regulation D, and wrote to the Fed earlier this week requesting the removal be made permanent.

The letter also notes credit unions’ support of the Paycheck Protection Program (PPP), but called for the Small Business Administration (SBA) to address lender liability, provide timely feedback and update guidance pertaining to:

  • Reflect state-chartered credit unions are eligible to be PPP lenders;
  • Lender prioritization;
  • The use of SBA forms;
  • Purchasing process of loans.

“We ask Congress to ensure Treasury and the SBA simplify the forgiveness application process for loans under $350,000,” the letter reads. “This threshold would capture the vast majority of loans and is the amount at which the CARES Act makes the lowest cutoff in determining lender processing fees. Additionally, the agencies should consider making forgiveness of these loans automatic or simply require a good faith certification that the funds were spent on forgivable expenses.”

CUNA also urged Congress to take the following actions to support NCUA’s Central Liquidity Facility:

  • Expand the CLF’s borrowing authority to 25 times the paid in capital;
  • Extend the expanded borrowing authority until Dec. 31, 2021; and
  • Make permanent the ability of corporate credit unions to act as agents for credit unions.

The letter also expresses support for S. 3841, a bill introduced by Sens. Chuck Grassley (R-Iowa) and Sherrod Brown (D-Ohio) that would protect Economic Impact Payments from garnishment.