Removing Barriers Blog

CUNA writes to HFSC prior to COVID-19 Stimulus hearing
Posted February 04, 2021 by CUNA Advocacy

Earlier today, CUNA wrote to Chairwoman Waters and Ranking Member McHenry prior the House Financial Services Committee hearing Chairwoman Waters and Ranking entitled, “More than a Shot in the Arm: The Need for Additional COVID-19 Stimulus.”  Throughout the COVID-19 pandemic, we have seen economic disruption across the country with revenue streams coming to a halt and the number of unemployed or financially distressed consumers significantly increased.

CUNA urges Congress to take further legislative action to ensure that credit unions remain in a position to serve their more than 120 million members including:

Exempt Member Business Loans During and for One Year After the National Emergency
As the COVID-19 pandemic persists, 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 MBL cap which limits some credit union lending activity to 12.25% of assets.

Provide Temporary Flexibility to NCUA to Offer Forbearance from Prompt Corrective Action Requirements
As Congress considers addition pandemic recovery legislation, we encourage you to include language that provides temporary flexibility to NCUA to offer forbearance from prompt corrective action credit unions impacted by the pandemic and which were otherwise healthy prior to the onset of the crisis. While credit unions entered the crisis extremely well-capitalized, the impact of the ensuring economic crisis has and will put stress on capital and, given credit unions’ limited ability to raise capital, the regulator could use additional tools.

Given that a statutory change is required, we urge you to include language providing NCUA temporary flexibility on the upcoming recovery bill.

Community Development Financial Institutions (CDFI)
CUNA appreciates the creation of programs to aid CDFIs in the last COVID-19 relief legislation including the Emergency Capital Investment Program (ECIP) and Rapid Response Program (RRP). However, it is not clear whether eligibility for the ECIP program is limited to CDFIs and Minority Depository Institutions exclusively. Additionally, the RRP requires quarterly reporting at a level of detail would be a prohibitive burden for credit unions and severely limit participation in the program. We ask Congress to urge the Treasury Department to provide clear guidance for the eligibility of the ECIP; ensure the RRP process does not favor past CDFI Fund awardees; and modify RRP reporting.