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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 news related to the Senate's work on a possible Phase 4 coronavirus relief package, U.S. debt, and more.

Senate at odds over Phase 4

As the Senate is set to return to session next week, the chamber's Republican and Democratic leaders remain at odds over how to approach the package. As NAFCU previously reported, Senate Republicans had floated the idea of a "skinny" or "targeted" relief package that appears to largely mirror the original package released in July, but without provisions like another round of stimulus checks or credit for retained employees. However, Senate Minority Leader Chuck Schumer this week sent a letter to Senate Democrats calling for more to be done on issues related to rental assistance, state and local services, and more.

The House previously passed its Phase 4 proposal – the HEROES Act – that included some NAFCU supported provisions, as well as others that could hurt the credit union industry and financial system as a whole. NAFCU continues to advocate for credit union priorities to be included in any final relief package.

CBO: U.S. debt almost equal to size of economy

A new report from the Congressional Budget Office (CBO) predicts the federal budget deficit will reach $3.3 trillion in 2020 – more than three times the amount of 2019's shortfall and the largest since 1945. The increased debt is largely due to the economic impact of the coronavirus pandemic and subsequent legislative efforts to stymie its consequences on consumers and businesses. In addition, federal debt is expected to be 98 percent of GDP in 2020 before exceeding GDP in 2021 and rising to 107 percent in 2023. The previous peak of debt compared to GDP was 106 percent in 1946, following large deficits incurred by World War II.

More time to review proposed flood insurance Q&As

Earlier this summer, the federal financial regulators – including the NCUA – proposed updated flood insurance Q&As intended to reduce lenders' compliance burden under federal flood insurance laws and are seeking public feedback on the revisions. The Q&As are related to the 2015 joint agency rule that modified regulations that apply to loans secured by properties located in special flood hazard areas. New questions proposed would address escrow of flood insurance premiums, force-placement procedures, and more.

Comments on the proposal were set to be due today, but earlier this week the regulators extended the comment period to Nov. 3.

Resources for FIs impacted by hurricane, wildfires available

Federal and state financial regulators this week released an interagency statement on supervisory practices in the wake of Hurricane Laura and wildfires in California. The agencies encouraged financial institutions to work with their members and customers to meet the financial services needs within their communities, and outlined several areas related to:

• lending, noting that "prudent efforts to adjust or alter terms on existing loans in affected areas should not be subject to examiner criticism;"
• temporary facilities;
• publishing requirements;
• regulatory reporting requirements;
• Community Reinvestment Act (CRA) considerations; and
• investments.

In addition, the NCUA previously urged credit unions in the path of Hurricane Laura to take precautions. Several resources available to credit unions are outlined here.

CDC prepares for vaccine release

The Centers for Disease Control and Prevention (CDC) Director Robert Redfield last week sent a letter to state governors asking them to expedite applications for distribution facilities – and "consider waiving requirements that would prevent these facilities from becoming fully operations" – to be able to begin distributing a coronavirus vaccine Nov. 1. Redfield indicated that states will soon be receiving permit applications from the CDC's contracted company to distribute vaccines. Other planning documents from the CDC have outlined timelines for when vaccines will be available and when the supply chain might face strains.