Removing Barriers Blog

Letter sent to HFSC Leadership in support of MBL legislation
Posted April 24, 2020 by CUNA Advocacy

Last night, CUNA wrote to Chairwoman Waters and Ranking Member McHenry urging the Committee to remove barriers preventing credit unions from fully serving their communities as Phase 4 of the COVID-19 relief legislation comes together. 

Ensuring Small Businesses Can Access Credit from Credit Unions
For many small businesses and their employees, the economic disruption caused by the COVID-19 pandemic means financial catastrophe. As the economy recovers, all available small business credit needs to be deployable. 

The letter supports the bipartisan legislation, H.R. 6550, introduced last week that would temporarily lift the MBL cap for three years and is narrowly tailored for loans related to COVID-19. 

We believe H.R. 6550 is commonsense legislation that provides a narrow remedy to ensuring that small businesses can effectively access essential credit from local credit unions. We encourage its inclusion in upcoming legislation.

Ensuring Credit Unions Have Access to Sufficient Liquidity to Meet Members’ Needs
The CARES Act included a much-needed expansion of the National Credit Union Administration’s Central Liquidity Facility (CLF), allowing corporate credit unions to act as agents for natural person credit unions and expanding the CLF’s borrowing authority from 12 times the paid in capital to 16 times. These changes make the CLF more accessible to credit unions and expand the amount of liquidity NCUA could provide credit unions. These measures sunset at the end of 2020. 

Given the unprecedented nature and the depth of this pandemic and the subsequent economic crisis, we urge Congress to expand the CLF’s borrowing authority to 25 times the paid in capital, extend the expanded borrowing authority until December 31, 2021, and to make permanent the ability of corporate credit unions to act as agents for credit unions.

These measures sunset at the end of 2020. CUNA requests that the expanded borrowing authority be extended to the end of 2021 and the corporate credit union ability to act as agents made permanent.