Phase 3 coronavirus package with CU relief now law
Following Senate passage earlier in the week, the House Friday passed by voice vote the Phase 3 coronavirus relief package – the CARES Act – which includes several provisions for which NAFCU had advocated. The president subsequently signed it into law.
NAFCU aggressively lobbied Capitol Hill throughout negotiations on the bill to ensure credit unions have the relief they need to serve members and communities as the coronavirus introduces challenges.
The final legislation includes several wins for credit unions, including:
- flexibility for the NCUA in dealing with troubled debt restructurings (TDRs);
- an adjustment to the definition of eligible institutions to ensure credit unions are eligible for new Small Business Administration (SBA) programs;
- several enhancements to SBA offerings, including a direct appropriation for $349 billion for guaranteed 7(a) loans, a new paycheck protection program, and loan forgiveness;
- some temporary relief in complying with the current expected credit loss (CECL) standard in 2020;
- flexibility for credit unions to access the NCUA's central liquidity facility (CLF); and
- ability of NCUA to provide temporary guarantees for non-interest bearing transaction accounts.
While positive changes were made between drafts of the bill and the final text, there are some provisions that could place new requirements and burdens on credit unions related to borrowers' ability to request forbearance on federally-backed mortgage loans. The association will continue to share how these changes could burden credit unions and work to obtain relief under them.
NAFCU has a summary of the CARES Act's key provisions for credit unions available in an easy-to-read chart online. The association also put together an FAQ document on the Phase 2 relief package.
Stay tuned to NAFCU Today for the latest developments and visit the association's coronavirus resource page.