Removing Barriers Blog

CUNA Sends a Letter to NCUA Supporting Technical Amendment on PPP
Posted May 28, 2020 by CUNA Advocacy

CUNA sent a letter to the NCUA supporting their technical amendment necessary to help credit unions that made PPP loans.

"PPP was authorized by the Coronavirus Aid, Relief, and Economic Security (CARES Act), which was signed in to law on March 27, 2020. The Small Business Administration (SBA) published an interim final rule that implemented PPP on April 2, 2020, with a start date of April 3, 2020," the letter reads. "The unprecedented speed with which PPP was rolled out to consumers left many gaps in various aspects of the loan program and how these loans would be treated under NCUA’s lending and capital regulations. Nonetheless, credit unions stepped up to the plate on April 3 to make loans to needy businesses without knowing how many important features of PPP would work and how PPP loans would impact a credit union’s balance sheet."

The letter agrees that these loans should have zero percent risk weight under NCUA's risk-based capital rules as required by the CARES Act and that the interim final rule properly implements cuna.org this requirement.