The Independent Community Bankers of America wants Congress to reexamine the credit union tax exemption and its relationship to credit union-community bank acquisitions. They believe that the acquisitions are putting small business lending experts at risk.
Credit union trade groups have told Congress that if the statutory 12.25% cap on business lending was removed then credit unions would have additional billions of dollars available to make loans to small business.
The Credit Union National Association and the National Association of Federally-Insured Credit Unions stopped making campaign contributions after the insurrection at the U.S. Capitol, but will now resume them. CUNA was the 12th largest contributor to the 147 Senators and Representatives who objected to the counting of the electoral votes for Joe Biden, according to the Center for Responsive Politics.
Credit unions might be forced to decline members or their deposits if the NCUA does not take action to ease credit union net worth ratio problems caused by the pandemic, CUNA and the American Association of Credit Union Leagues warned late last week.
The American Bankers Association would like the National Credit Union Administration to extend the comment period on a proposed rule that would allow CUSOs to originate any type of loan that a federal credit union may originate. The current comment period ends on March 29 and the ABA wants it extended until May 28.
Financial services trade groups, including the Credit Union National Association and the National Association of Federally-Insured Credit Unions, are concerned that the Paycheck Protection Program will expire on March 31 with thousands of loans stuck with “holds” that will prevent those small businesses from getting assistance. They want all loan applications received by the March 31 expiration date of the PPP to be processed.
In a letter to the Senate Banking Committee and the House Financial Services Committee, Curt Long of the National Association of Federally-Insured Credit Unions argues that the National Credit Union Administration’s equity ratio will bounce back. Therefore NAFCU is opposed to a credit union premium assessment.
The Credit Union National Association and the National Association of Federally-Insured Credit Unions are warning Congress that small businesses are going to continue to struggle from the economic impact of COVID-19, even after the most recent cycle of the Paycheck Protection Program is completed.
The Normal Operating Level of the Share Insurance Fund, set by the National Credit Union Administration before the pandemic, is 1.38%. The ratio currently sits at 1.26% and at 1.20% the NCUA will be required to develop a restoration plan that will involve additional premiums on credit unions. The Credit Union National Administration, the National Association of Federally-Insured Credit Unions and the National Association of State Credit Union Supervisors all oppose a premium now, arguing that the ratio is higher because of economic stimulus payments to members and that charging credit unions additional premiums during an economic downturn is not a good plan.
The National Association of Federally-Insured Credit Union’s Curt Long is predicting that the National Credit Union Association’s Share Insurance Fund will be strong enough that a new premium will not be needed. The official word on this will come at the NCUA’s board meeting on February 18.