The Senate Republican pandemic economic stimulus plan, a three-bill package released Monday, would simplify the loan forgiveness process for Paycheck Protection Program loans, but the measure so far contains few other priorities that credit union trade groups have been pushing.
The GOP measures would provide $10 billion of PPP funds for lending by community financial institutions, including credit unions with consolidated assets of less than $10 billion.
The Senate Republican proposals do not extend the life of changes to the National Credit Union Administration’s Central Liquidity Facility. The National Association of Federally-Insured Credit Unions has asked for those temporary changes to be made permanent, while the Credit Union National Association asked for those changes to be extended to the end of 2021.
The bills also do not increase the NCUA member business lending cap. Credit union trade groups have said that raising the cap would allow credit unions to help businesses recover from the coronavirus crisis. Banking trade groups have argued that credit unions are simply using the coronavirus crisis as an excuse for increasing member business lending.
The bills also do not provide a safe harbor for financial institutions that provide services to marijuana-related businesses. The House Democratic bill includes that provision, which CUNA supports
Neither CUNA nor NAFCU had reaction to the Senate proposal.
Immediately after the bills were unveiled, congressional negotiators from both parties and White House officials began talks over a possible compromise stimulus bill. The House already has passed a much more ambitious measure that includes aid to state and local governments whose budgets have been sharply affected by the coronavirus crisis. The Republican measure does not include that assistance.
The GOP bills do include limited legal immunity for businesses that are operating during the pandemic—something that credit union trade groups have been seeking, but Democrats loathe.
The Senate bills would allow businesses with fewer than 300 employees that have seen a 50% drop in gross revenue apply for a second PPP loan of under $10 million. The measure also would set aside $25 billion in loans for businesses with ten or fewer employees.
The proposals include a prohibition against any action against a lender who, in good faith, relied on the certification submitted by a PPP borrower.