NAFCU's Berger details CU perspective on HEROES Act
Ahead of an expected House vote on the measure today, NAFCU President and CEO Dan Berger Thursday wrote to House leadership to share credit unions' perspective on the proposed Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. House Democrats unveiled the $3 trillion proposal for the next phase of coronavirus relief earlier this week.
As proposed, the bill focuses on providing assistance to workers, renters and homeowners, state and local governments, and more.While the HEROES Act does not contain certain provisions NAFCU has advocated against including, it does broaden mortgage forbearance to all single-family covered mortgages, not just those backed by the government, and includes the potential for a blanket restriction on first party debt collection during a national emergency, which could put unnecessary stress on credit unions.
In the letter, Berger noted credit unions' efforts to assist their members, including the important rule credit unions play in helping small business through the Small Business Administration's (SBA) paycheck protection program.
"NAFCU survey results have found that credit unions participating in the PPP have made, on average, over 200 loans in the first two phases, though we have heard from some credit unions that have made over 1,000 loans," highlighted Berger. "While there is variation, the average loan size made by credit unions is well under $75,000. "
"Even more strikingly, NAFCU’s survey also found that over 75 percent of credit unions’ approved PPP loans went to self-employed/gig workers or businesses with under 10 employees," he added.
The HEROES Act makes several changes to the PPP, such as e eliminating the requirement that at least 75 percent of the PPP loan forgivable amount must be used toward payroll; and clarifying the "hold harmless" provision for lenders, for which NAFCU has advocated.
Berger shared NAFCU's support for HEROES Act measures that would help credit unions serve their members, including:
- changes to SBA loan programs other than the PPP, including increasing the guaranteed portion of existing SBA loans to 90 percent until September 30, 2021; and
- an additional $1 billion in emergency funding for the Community Development Financial Institutions (CDFI) Fund.
Berger also highlighted additional measures NAFCU believes must be included in any future relief efforts and has previously advocated for, including:
- legislation to exclude business loans made in response to the coronavirus pandemic and relief efforts from the credit union member business lending (MBL) cap;
- legislation to provide credit unions with relief from the 15-year general maturity limit found in the Federal Credit Union Act;
- capital and prompt correction action flexibility;
- additional CDRLF funding;
- liquidity for credit unions; and
- legislation that would allow credit unions to do more to help underserved populations.
Additionally, Berger emphasized that the HEROES Act should be "balanced to not harm credit unions' ability to serve their members," and raised concerns with some of the provisions which may have unintended consequences.
NAFCU will continue working with lawmakers to address credit unions' concerns and provide more relief to the industry and will keep credit unions informed of the latest developments.
Add to Calendar 2021-02-26 14:00:00 2021-02-26 14:00:00 The CDFI Rapid Response Program With the recent COVID-19 relief legislation, unprecedented levels of funding are being directed to underserved communities, especially communities of color. Community Development Financial Institution (CDFI) certified credit unions have a critical role to play in deploying these funds. The CDFI Fund's Rapid Response Program (RRP) opens by February 25th, making available $1.25 billion in grants to CDFIs. This webinar will help you to prepare for the RRP and other CDFI applications. All first-time CDFI Fund grant applicants are urged to attend. Don’t miss this unique opportunity to learn more about how your credit union can tap into these resources for the benefit of the members and communities you serve. CDFI certification is an essential credential for credit unions with a focus on financial inclusion today. If you have never applied for a CDFI grant, don’t miss this critical webinar. Key Takeaways Review updated information about the RRP opportunity and application process Walk through critical first steps to complete before you apply for CDFI Fund grant Register Now For On-Demand AccessRegistration is complimentary, but you must register to attend.One registration gives your entire credit union access to the on-demand recording until February 26, 2022.Already registered? Go to the Online Training Center to view live. Who Should Attend? Chief Executive Officers (CEOs) Chief Lending Officers (CLOs) Business Lending Staff Lending Staff Education Credits This webinar doesn't qualify for any continuing education credits recognized by NAFCU or NASBA. About Our Webinars Our webinars are streamed live from NAFCU headquarters near Washington, D.C. Your audio/video feed of the presenters includes presentation slides and downloadable handouts. You can easily submit your questions to the presenters at any time during the live broadcast, with no dialing over the phone! The audio and video stream directly through your computer. Web NAFCU firstname.lastname@example.org America/New_York public
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