Newsroom

NAFCU's widely-read NAFCU Today is credit union leaders' go-to source for the latest on issues impacting the credit union industry. For those short on time, here's a roundup of this week's top need-to-know updates on NCUA's plan to remit distributions to former members of failed corporate credit unions, the paycheck protection program (PPP), and more.

NCUA's McWatters gives insights into failed corporate CUs plan

In an open letter following the announcement of President Donald Trump’s nomination for his successor, NCUA Board Member J. Mark McWatters pointed out that many credit unions “were not aware” of the NCUA’s possible plan to begin making distributions to the former members of U.S. Central, Members United, Southwest and Constitution corporate credit unions. The breakdown of distribution – as of December 2019 – is available on the NCUA’s website and includes:

• projected repayments of membership capital for U.S. Central, $1.666 billion; Members United, $493 million; Southwest, $404 million, and Constitution, $36 million; 
• projected repayments of paid in capital for Members United is $79 million; and 
• potential liquidating dividends projected are $16 million and $299 million for Members United and Southwest, respectively.

More clarity needed on PPP forgiveness

As lawmakers and other stakeholders have echoed NAFCU's call for a simplified and streamlined forgiveness process for PPP loans, a new article from the Financial Times features NAFCU Vice President of Legislative Affairs Brad Thaler's concerns that small lenders and borrowers will be overly burdened. It also highlights that even big banks, such as JPMorgan Chase, Bank of America and Wells Fargo, “were not in a position to begin accepting applications for loan forgiveness.” NAFCU continues to advocate for automatic forgiveness of loans below $150,000 and urges the SBA to release additional guidance on the forgiveness process. Earlier this week, the Small Business Administration and the Treasury published a new EZ version of the forgiveness application for specific borrowers and released a revised, borrower-friendly paycheck protection program (PPP) loan forgiveness application implementing changes made by the recently enacted Paycheck Protection Program Flexibility Act (H.R. 7010).

One charged in new PPP fraud case

The owner of several information technology companies has been charged in a complaint with allegedly filing a bank loan application fraudulently seeking more than $400,000 in a forgivable PPP. Rahul Shah allegedly filed IRS forms representing his company’s quarterly payroll expense for 2019 which were later compared to Shah’s original IRS forms which reported a significantly lower payroll expense. NAFCU continues to monitor ongoing cases involving PPP fraud.

Blood type might influence COVID-19 symptoms

A report in the New England Journal of Medicine suggests that blood type might influence whether someone develops severe symptoms of the coronavirus. However, scientists caution that there is not yet enough evidence and encourages further verification via the testing of more coronavirus patients. Blood type has previously been tied to the susceptibility of some other infectious diseases. While the report in the New England Journal of Medicine doesn't prove a specific blood type connection, it does confirm a previous report from China of such a link. Read more here.