NAFCU reiterates CU priorities for coronavirus relief
In a letter to Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y., and the entire Senate, NAFCU President and CEO Dan Berger detailed what provisions future coronavirus relief packages should include to ensure the credit union industry and its members can thrive.
NAFCU's award-winning advocacy team has maintained constant contact with congressional offices and leaders to keep credit union priorities top-of-mind as lawmakers consider what relief measures are working and what more needs to be done.
"As Congress considers the next steps in the legislative effort to provide relief and respond to the pandemic, we strongly urge you to address the concerns of the nation’s credit unions and the 120 million Americans that they serve that we have outlined in this letter," Berger wrote Thursday. "In times of economic crisis, credit unions always focus on their members and doing all that they can to help. It is critical that Congress ensure that measures in Phase IV and beyond assist in this effort."
Berger outlined three areas that Congress should address in future relief packages and provided specific ways to do so. Here is a roundup of Berger's recommendations; read the full, detailed letter here.
Updates needed to earlier phases of COVID-19 relief include:
- strengthening the paycheck protection program (PPP) by ensuring timely, clear guidance, providing more funds and set asides for Community Development Financial Institutions (CDFIs) and minority depository institutions (MDIs), and establishing a lender hold harmless provision;
- addressing mortgage servicers forbearance concerns and addressing issues related to hazard insurance, flood insurance, and property tax payments;
- making changes to the NCUA's Central Liquidity Facility (CLF) permanent; and
- providing relief on par with what community banks received on capital flexibility and share/deposit guarantees.
Additional relief measures to help credit unions continue to serve their members include:
- providing relief from the member business lending (MBL) cap;
- providing credit unions with an exemption from the current expected credit loss (CECL) standard or further delaying the rule, and granting the NCUA greater interpretive control over CECL implementation;
- allowing NCUA to waive requirements of a net-worth restoration plan for credit unions that are less than adequately capitalized for up to 180 days;
- providing $1 billion in emergency funding to the CDFI Fund and Community Development Revolving Loan Fund (CDRLF), making it easier for credit unions to become a CDFI, and increasing CDRLF grants;
- establishing an emergency qualified mortgage (QM) standard with flexible requirements and extend the temporary government-sponsored enterprise (GSE) QM patch if the CFPB does not provide one in its expected rulemaking;
- including credit unions in the definition of community financial institution in the Federal Home Loan Bank Act;
- allowing all credit unions to add underserved areas to their fields of membership;
- modernizing credit union's field of membership requirements to expand consumer access to credit union services;
- modernizing outdated governance provisions of the Federal Credit Union Act, including removing an outdated in-person meeting requirement;
- raising the maturity limit on certain credit union loans from its current 15-year limit;
- modernizing the E-SIGN Act; and
- enacting legislation to protect credit unions and other essential businesses from lawsuits related to the coronavirus pandemic.
Berger also cautioned against several proposals that could harm credit unions and their members, including efforts to expand interchange price caps and eliminate courtesy pay fees.
While the Senate isn't expected to pursue a Phase 4 relief package until later this summer, senators are beginning to compile ideas for a Senate bill. NAFCU will continue working with Congress, the administration, and other agencies to ensure credit unions and their members have the resources available to recover from the coronavirus pandemic.
The association's upcoming State of the Industry virtual event will provide credit unions with insights into legislative and regulatory efforts to address the pandemic and help the industry develop strategic plans to move forward. Learn more and register for the complimentary event here.
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