Actions needed now to head off deeper, longer crisis
NCUA and Congress should take further steps to ensure credit unions remain in position to serve members during and after the pandemic, CUNA wrote to the House Financial Services Committee Thursday. NCUA Chairman Rodney Hood testified at the hearing, which also featured discussion of two CUNA-backed bills.
The Access to Credit for Small Businesses Impacted by the COVID-19 Crisis Act (H.R. 6789) would exempt credit union business loans related to the pandemic from the member business lending cap for one year; and
The Preventing Regulatory Penalties for PPP Lenders Act (H.R. 8675) would prevent regulatory penalties for Paycheck Protection Program (PPP) lenders.
“Significant looming stress reflected in the Census Bureau Household and Small Business Pulse Surveys suggests the NCUA and Congress should act now to head off a deeper and longer lasting crisis—and to ensure that credit unions maintain their ability to effectively intervene and help members navigate through the mounting near-term risks,” the letter reads. “Therefore, as Congress contemplates further COVID-recovery legislation and exercises its oversight responsibilities over the Federal financial regulators, it is critical that policy be examined and modified to ensure credit unions remain in a position to serve their members throughout and after this crisis.”
Steps NCUA can take include:
- Refraining from any share insurance fund premium assessments;
- Temporarily excluding certain low-risk assets from net worth ratio;
- Permitting capitalization of interest on consumer mortgage loans; and
- Removing obstacles to consumers accessing the Payday Alternative Loans I program.
- Extend expiring CARES Act provisions related to Troubled Debt Restructuring and NCUA’s Central Liquidity Facility;
- Provide temporary flexibility to NCUA to offer forbearance from PCA requirements;
- Simplify the PPP loan forgiveness process. CUNA supports House and Senate bills to allow simple forgiveness for PPP loans under $150,000; and
- Exempt member business loans during, and for one year after, the national emergency. CUNA supports House and Senate bills that would accomplish this.
Hood testified before the Senate Banking Committee Tuesday.