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NAFCU's award-winning advocacy team ensures credit union priorities stay in front of Washington's key decision makers, and these efforts have not stopped amid the coronavirus pandemic. Over the past few weeks, the association's advocacy – supported by member credit unions' efforts – has achieved wins and seen progress on several fronts. See the comprehensive list of what NAFCU's been fighting for.

Regulation D transfer limit eliminated

• NAFCU has long advocated for the six-per-month transfer limit between savings and checking accounts under Regulation D to be eliminated and doubled down on its advocacy amid the coronavirus pandemic. While the Federal Reserve's announcement in March to eliminate reserve requirements provided credit unions with some relief from the Regulation D restrictions but did not eliminate the limit, the Fed last month heeded NAFCU's call to completely eliminate the transfer limit. Some uncertainty remained as to whether it was a permanent change, leading NAFCU President and CEO Dan Berger to write the Fed urging clarification of its permanence. The Fed responded shortly after by updating FAQs to clarify that it has no plans to re-impose the limit and that the amendments do not result in "savings deposits" now being covered by Regulation CC, another concern NAFCU had flagged.

Paycheck protection program (PPP) access, guidance

• Since the launch of the Small Business Administration's (SBA) loan program, NAFCU has been leading the way to ensure credit unions have all the resources needed to effectively participate in the PPP. NAFCU's Berger earlier this month briefed the House Financial Services Committee on some of the issues credit unions have experienced and industry priorities for more guidance and resources. The association aggressively lobbied Congress throughout negotiations and requested that a portion of additional funds be set aside for credit unions to be able to meet their members' needs, which was provided in the second round of funding. In another win for credit unions, the SBA last month reserved an 8-hour window exclusively for lenders with less than $1 billion in assets to submit PPP loan applications after NAFCU had flagged credit unions' problems accessing the platform. The SBA may consider additional reserved times for small lenders in the future. Also following NAFCU's advocacy for more guidance, the SBA Friday released the loan forgiveness application for borrowers. NAFCU will continue to work with the SBA, Treasury Department, and Congress on more guidance and funding to ensure credit unions can lend to small businesses in their communities.

Member business lending (MBL) cap relief

• NAFCU's longstanding call for relief under credit unions' arbitrary MBL cap has garnered bipartisan support in Congress as lawmakers work to ensure small businesses have access to funds needed to recover from the coronavirus pandemic. Legislation has been introduced in both the House and Senate to exempt certain loans made during the pandemic from the MBL cap and NAFCU continues to advocate for this relief to be included in future relief packages, spearheading an effort that saw a bipartisan group of 65 House members write leadership to urge its inclusion. These efforts are also supported by NCUA Chairman Rodney Hood and Board Member Todd Harper. In addition to MBL reforms, NAFCU and the NCUA have called for increasing federal credit unions' loan maturity limit.

Expanded access to NCUA's Central Liquidity Facility (CLF)

• The NCUA last month issued an interim final rule to enhance credit unions' ability to access and use the CLF, codifying temporary changes made by the CARES Act and adopting other, non-expiring improvements. As Congress considers additional coronavirus relief packages, NAFCU is advocating that changes made to the CLF are made permanent; proposals to extend these changes at least through 2021 have been introduced in both the House and Senate. NCUA's Hood and Harper have also asked Congress to make these changes permanent. Since the CLF changes were implemented, the NCUA announced that all 11 corporate credit unions have joined the CLF as agent members, increasing the borrowing capacity of the CLF and enhancing the amount of liquidity available to small- and medium-sized credit unions.

Support for mortgage servicers

• As forbearance requests have increased in the wake of the coronavirus pandemic, NAFCU has shared with the Federal Housing Finance Agency (FHFA) and Treasury Department its concerns about the health of the mortgage market and need for relief for mortgage servicers. The FHFA heeded NAFCU's call and is providing a four-month limit on advances of principal and interest payments for loans in forbearance sold to the GSEs, as well as allowing the GSEs to purchase mortgages in forbearance. The agency also announced a new payment deferral option that will allow loans to remain in the MBS pool. The CARES Act allowed borrowers to request forbearance for GSE-backed, single-family mortgages, and the House-passed HEROES Act seeks to expand forbearance requests to all single-family covered mortgages, which NAFCU has cautioned against. In addition, the CARES Act included a NAFCU-sought provision to provide flexibility for the NCUA in dealing with troubled debt restructurings (TDRs); the association continues to work with the NCUA to obtain clarity on loan modifications and treatment of TDRs.

Capital reforms

• NAFCU has urged the NCUA to grant credit unions "additional capital flexibility to address the economic crisis" and provide parity with banks in light of the coronavirus pandemic. The CARES Act reduced the community bank leverage ratio (CBLR) from 9 to 8 percent and NAFCU has continued to advocate for similar capital flexibility, as well as modifications to prompt corrective action (PCA) requirements, for credit unions in letters to the Senate Banking Committee last week – submitted into the record at its regulator hearing and in a follow-up – and to the House Financial Services Committee.

Current expected credit loss (CECL) standard relief

• As the coronavirus pandemic has highlighted the potential negative effects of the CECL standard, NAFCU, NCUA, and lawmakers have continued to voice concerns about the standard hindering financial institutions' ability to lend effectively during the recovery. The CARES Act provided temporary relief under CECL through the end of the year, but the standard isn't effective for credit unions until 2023. NCUA's Hood earlier this month backed NAFCU's call for an exemption for credit unions under the standard, arguing that its compliance costs outweigh its benefits. NAFCU maintains that credit unions should not be subject to CECL and will continue to work with FASB and the NCUA to obtain relief for the industry. The association has numerous resources available to credit unions as they prepare to implement the standard.

Additional funding for CU-used programs

• NAFCU has advocated for additional funding for the Treasury Department's Community Development Financial Institution (CDFI) Fund and NCUA's Community Development Revolving Loan Fund (CDRLF) "as they are important tools for credit unions to have access to funds to help those in underserved and lower-income areas." The NCUA recently announced that the majority of 2020 CDRLF appropriations will be made available for coronavirus pandemic relief assistance, and NAFCU has discussed with the NCUA ways to expand credit unions' access to the CDRLF grant and loan opportunities.
• The HEROES Act would provide $1 billion for economic support and recovery in distressed communities by providing financial assistance to CDFIs. NAFCU will continue advocating for more funding to ensure low-income and underserved communities have the resources they need to weather the pandemic.

Preventing harmful provisions from being included in COVID-19 relief packages

• NAFCU has successfully pushed back against attempts to extend the Durbin Amendment of the Dodd-Frank Act – which places a price cap on interchange fees on debit card transactions – to credit cards in the wake of the coronavirus pandemic. Last month, a coalition of advocacy groups echoed NAFCU's concerns of extending the Durbin Amendment in a letter to President Donald Trump and congressional leaders. In addition to these efforts, NAFCU continues to share concerns about altering credit reporting procedures that could negatively impact lenders' operations.

NAFCU has several coronavirus resources available to help credit unions through the pandemic, including newly updated PPP FAQs and an easy-to-read chart outlining regulators' efforts.

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