Expiring CARES Act relief provisions must be extended

December 1, 2020

Essential CARES Act provisions will expire at the end of the month and should be extended, CUNA wrote to the Senate Banking Committee Tuesday. The committee heard testimony from Treasury and Federal Reserve Leaders on implementation of the CARES Act Tuesday.

The CARES Act expanded the borrowing authority of NCUA’s Central Liquidity Facility to 16 times the paid in capital (up from 12 times). This is set to expire Dec. 31.

“Given the unprecedented nature and the depth of this pandemic and the subsequent economic crisis, we urge Congress to expand the CLF’s borrowing authority to 25 times the paid in capital, extend the expanded borrowing authority until December 31, 2021, and to make permanent the ability of corporate credit unions to act as agents for credit unions,” CUNA’s letter reads. “The consequence of not having these provisions in place prior to this crisis is that NCUA has had to engage in a membership campaign for the CLF, asking credit unions to contribute capital to the facility at the very time credit unions are most reluctant to give up capital. Congress should take steps to ensure the long-term viability of the CLF, so that it can be prepared to help credit unions in future crises.”

The CARES Act also exempts certain COVID-related loan modifications from Troubled Debt Restructuring (TDR) treatment, also set to expire Dec. 31.

“Credit unions want to help as many Americans as possible. Under the CARES Act, credit unions are required treat members with Federally backed loans in a certain way, and they have been doing that. But it’s critically important to extend that same accommodation to other borrowers who need it,” the letter reads. “We need consistency in how consumers are treated. Therefore, we urge Congress to extend the CARES Act’s temporary TDR relief for an additional year, until the end of 2021.”

CUNA also shared comments on the implementation of the Paycheck Protection Program, including: