PPP forgiveness, TDR relief extension in bipartisan COVID/funding bill
Federal policymakers unveiled an omnibus spending bill Monday that would fund the federal government through Sept. 30, 2021, and includes several CUNA-sought provisions related to pandemic relief. The bill contains CUNA-League supported language delaying the current expected credit loss (CECL) standard, Troubled Debt Restructuring (TDR), and Paycheck Protection Program (PPP) forgiveness clarity, as well as legislation addressing several other key credit union priorities.
“We’re very pleased to see a number provisions in the compromise bill that will help credit unions remain in a position to serve their members during and after this crisis. We urge Congress and the administration to take swift action to pass the bill,” said CUNA President/CEO Jim Nussle. “Throughout the pandemic, credit unions have been there for their members as financial first responders. We know credit unions will continue to be a vital part of the economic recovery.”
CUNA sent a letter to Congressional leadership Monday evening in support of the legislation.
Specifically, the bill contains:
- Language from CUNA-supported legislation sponsored by Sen. Kevin Cramer (R-N.D.) that would simplify forgiveness for PPP loans under $50,000. CUNA has strongly backed this legislation since it was introduced, and presented analysis to Congress over recent weeks showing automatic forgiveness is more cost-effective for both the government and lenders;
- Reauthorizing the PPP at $284 billion;
- A one-year delay of implementation of the CECL standard;
- Extension of Central Liquidity and Troubled Debt Restructuring relief through the end of 2021. It was originally scheduled to expire Dec. 31, 2020;
- $12 billion for capital investments in Community Development Financial Institutions and Minority Depository Institutions with $3 billion going directly to loans and technical grants provided through the Treasury’s CDFI Fund;
- An extension through 2025 of the provision that exempts forgiven mortgage debt from income tax and an extension through 2021 of the deductibility of mortgage insurance premiums; and
- Amends the CARES Act Employee Retention Tax Credit to include federal instrumentalities like credit unions.
It also contains CUNA-supported funding amounts for FY2021 for the Treasury’s CDFI Fund ($270 million), NCUA’s Community Development Revolving Loan Fund ($1.5 million) and the U.S. Agency for International Development’s Cooperative Development Program ($18.5 million).
On Monday evening, the House and Senate passed the measure. The President is expected to sign it into law this week.