CUNA Endorses NCUA Plan to Exempt Paycheck Protection Program Loans from Fee Calculations

The National Credit Union Administration’s proposed new operating fee structure will help ensure that federal credit unions will not be penalized for participating in the Paycheck Protection Program, Luke Martone, the Credit Union National Association’s senior director of advocacy and council recently told the agency.

“As the PPP serves an important public purpose, the NCUA believes PPP loans warrant exclusion from total assets when determining operating fees,” Martone, said in a letter commenting on the agency’s proposed rule.

CUNA supports that effort, Martone said.

Under the agency’s current rule, a federal credit union must include the value of all loans made under the PPP in its Call Report sent to the agency. As a result, PPP loans would be counted in the credit union’s total assets when the NCUA calculates the institution’s annual fees.

The proposed rule would exclude PPP loans and includes a general statement that loans made under a future program like the PPP also would be excluded.

While the PPP has expired, many lawmakers have been pushing for it to be renewed.

“This change should help ensure that FCUs interested in making PPP loans do not bear greater financial burdens for doing so,” Martone wrote.

Legislation that would exempt PPP loans from asset calculations also has been introduced in the House, but the House will not return to Washington until after the Nov. 3 election.

Martone also endorsed a second change in the NCUA fee calculation in the proposed rule.

Currently, a federal credit union’s annual fee is based on the credit union’s Call Report as of Dec. 31 of the previous fiscal year.

Under the proposed rule, the NCUA would use the average of a federal credit union’s Call Reports that have been filed at the time the agency approves its annual budget for the forthcoming year.

“We agree with the agency that this change will address seasonality and provide great certainty of upcoming operating fees,” Martone told the agency.


CUNA’s Nussle: PPP Loans Causing Net Worth Problems at Credit Unions

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