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During Wednesday's Senate Small Business Committee hearing to review the paycheck protection program (PPP), Committee Chair Ben Cardin, D-Md., indicated the Senate next week will work to pass legislation to extend the PPP by two months. The House passed the bill Tuesday evening; the PPP is currently set to expire March 31.

NAFCU shared its perspective on the legislation – which would delay the PPP's loan application deadline to May 31 and allow the Small Business Administration (SBA) to continue processing pending applications for 30 days after that date – with the Senate Small Business Committee ahead of the hearing. NAFCU has raised concerns about the amount of loans backlogged due to hold codes and has called on the SBA to clear the codes before the program ends. The association also highlighted improvements needed to the approval and forgiveness processes.

Lawmakers during the hearing asked about the role Community Development Financial Institutions (CDFIs) have played in providing the nation's smallest businesses with loans through the program. The Phase 4 relief package enacted in December set aside $15 billion of PPP funds for small, community-based lenders, including credit unions with less than $10 million in assets, and also provided NAFCU-sought emergency funding for the CDFI Fund.

NAFCU shared with committee members in its letter that "[a]n analysis of the [SBA's] PPP data from the first two rounds shows that credit unions made loans in amounts much lower than the national average, with the credit union average PPP loan approximately $50,000. Furthermore, a full 70 percent of credit union PPP loans went to businesses with less than five employees."

There are hundreds of CDFI-certified credit unions across the country, and NAFCU consistently shares with lawmakers how credit unions work to meet the needs of low-income, minority, and underserved communities. During a meeting earlier this year, NAFCU and member credit unions met with the NCUA on its new Advancing Communities through Credit, Education, Stability and Support (ACCESS) initiative and the value of CDFI designations. The NCUA's streamlined CDFI application process is currently open until April 3.

NAFCU continues to advocate to Congress ways in which it could provide additional tools to credit unions to better support members amid the pandemic.