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Treasury Secretary Steven Mnuchin and Federal Reserve Board Chairman Jerome Powell Tuesday addressed concerns related to the paycheck protection program (PPP) during a House Financial Services Committee hearing to examine the agencies' response to the pandemic.

Ahead of the hearing, NAFCU Vice President of Legislative Affairs Brad Thaler shared how credit unions are working to assist their members and outlined areas where additional relief is needed. 

In regards to economic recovery efforts, Mnuchin predicted that there will be large scale economic growth in the third and fourth quarters, particularly in home building. Of note, Powell indicated that a vaccine and treatment for the virus will be necessary to fully reopen the economy.

Many lawmakers showed support for an extension to the PPP and expressed the need for simplifying the forgiveness process, while also highlighting the success of the program.

Additionally, Mnuchin stressed the need to prevent and mitigate fraud within the program, pointing to verification forms backed by the Treasury department, and indicated that he believes Congress would have to act to bring about automatic forgiveness of smaller loans.

NAFCU has actively sought automatic forgiveness of small dollar PPP loans for the benefit of both small businesses and credit unions that are recovering from the coronavirus pandemic and may have strained financial and human resources.

The Senate earlier this month failed to advance a "skinny" version of Senate Republicans' Phase 4 coronavirus relief package, which included language from the NAFCU-supported Paycheck Protection Program Small Business Forgiveness Act (S. 4117) and additional funding for the program. The House previously passed a Phase 4 relief package earlier this year.  Efforts to come to a bipartisan agreement on another round of relief have currently stalled.  

Mnuchin and Powell also answered questions related to the Main Street Lending Facility and Municipal Liquidity Facility.

House Financial Services Committee Chairwoman Maxine Waters, D-Calif., and Ranking Member Patrick McHenry, R-N.C., spoke on Congress' efforts on coronavirus relief, including the PPP, during NAFCU's Congressional Caucus last week.

NAFCU has consistently advocated for credit unions' ability to lend effectively through the program and has worked with the SBA to obtain additional guidance and relief for lenders through the application and loan forgiveness processes. Access NAFCU's PPP FAQs.

NAFCU will continue to engage with the Treasury Department, Federal Reserve and lawmakers to ensure credit union credit union priorities are included in any final phase 4 relief legislation.