House Recovery Bill Ignores NCUA Requests for Member Business Lending Boost, Capital Requirements Decrease

The coronavirus relief bill unveiled by House Democrats Tuesday would not increase the credit union Member Business Loan cap or decrease capital standards—two major priorities of the NCUA and credit union trade groups.

The $3 trillion, 1,800-page bill includes about $1 trillion in aid to states and local government, as well as extended unemployment benefits and additional stimulus payments to taxpayers. It also would provide a safe harbor for financial institutions providing services to marijuana-related business.

Hood Asks Congress to Boost Member Business Lending Cap and Decrease Capital Requirements

Amid some opposition from a key Democrat, NCUA Chairman Rodney Hood told the Senate Banking Committee Tuesday that Congress should decrease capital standards for credit unions, as they respond to economic problems caused by the coronavirus crisis.

Hood said that he would like Congress to authorize a temporary reduction in minimum capital requirements—reducing the level at which credit unions are considered well capitalized from a net-worth ratio of 7% to 6%. He said that the level for “adequately capitalized” credit unions should be cut from 6% to 5%.

Dems Lambaste Trump Administration for PPP Management

Democrats are renewing their call for more rigid Paycheck Protection Program set-asides for credit union and community banks, following reports from a government watchdog contending that program funds may not be reaching the neediest businesses.

“Not only did [the Small Business Administration] fail to issue guidance to prioritize the paycheck loan applications of underserved and rural small businesses, the agency implemented a ‘first-come, first-served’ policy that made it harder for vulnerable small businesses to access PPP,” Senate Small Business Committee ranking Democrat Ben Cardin (D-Md.) said, following the release of a report by the Small Business Administration’s Inspector General.

Postal Banking Returns

Postal banking is back.

As policymakers battle over how to deal with the mounting losses facing the United States Postal Service, supporters of a plan to allow post offices to provide basic financial services are renewing their arguments that postal banking could help save the system.

Harper: Don’t Change CU Capital Standards

Clashing with NCUA Chairman Rodney Hood, board member Todd Harper is asking Congress not to reduce credit union capital standards in response to the coronavirus crisis.

“Reductions in capital standards could ultimately lead to greater losses for the Share Insurance Fund, which all surviving federally insured credit unions would need to pay,” Harper wrote to leaders of the House and Senate committees with NCUA oversight powers.