Removing Barriers Blog

CUNA writes to HFSC & Senate Banking prior to hearing on CARES
Posted March 24, 2021 by CUNA Advocacy

The House Financial Services Committee and Senate Banking Committees both held hearings with the Federal Reserve and Treasury for the quarterly CARES Act report to congress.  Prior to both hearings, CUNA wrote to leadership of each Committee in appreciation of the steps taken by the Department of Treasury, Federal Reserve, and Congress that helped credit unions remain in a position to serve their members, including allowing credit unions as lenders in the Paycheck Protection Program (PPP), simplifying the PPP loan forgiveness process and to leverage the power of Community Development Financial Institutions (CDFI) to assist communities in need.

Looking beyond PPP, however, small businesses across the country will continue to need capital and credit unions are able to pump billions into the economy at no cost to the government. However, an obstacle impedes credit unions from fully assisting these businesses: the arbitrary credit union business lending cap which limits credit union business lending activity to 12.25% of assets.

The letter urged the “swift passage” of the bipartisan bill from Reps. Brad Sherman (D-CA) and Brian Fitzpatrick (R-PA) that would exempt COVID-related lending from the cap for up to one year after the pandemic.

“We conservatively estimate that even temporarily removing the member business loan (MBL) cap will provide over $5.5 billion in capital to small and informal business ventures, creating nearly 50,000 jobs just over the course of the next year,” the letter reads.