Participants at the National Association of Federally-Insured Credit Unions’ virtual Congressional Caucus learn that senators from both parties think small businesses need additional assistance to get through the coronavirus economic crisis, but there is no agreement between Democrats and Republicans about how to proceed.
Federal officials are warning financial institutions about new ways that fraud can occur because of the pandemic. The Paycheck Protection Program has been a huge target for fraud and increasing cybercrime is a concern too.
The Senate Republican “skinny” economic stimulus bill failed to get the necessary votes to open debate on the bill. Since the bill failed, it is unclear whether Congress will enact any of the credit union priorities before leaving at the end of the month.
Senate Republicans on Tuesday unveiled a “skinny” economic stimulus bill that calls for another round of Payroll Protection Program loans, a simplified loan forgiveness process and limited liability for businesses reopening during the coronavirus economic crisis.
The Senate is likely to vote on the bill later this week. It is unlikely the measure has the votes to pass, but it could serve as the next step in the haggling over the next stimulus legislation.
The Senate returns this week and the House will return next week. There is still much to be done and it is unlikely that Congress will get to everything related to credit unions before the election. Here is a summary of the decisions and legislation that remain.
The Democratic staff of the House Coronavirus Crisis Subcommittee issued a report on the Paycheck Protection Program. The report says the PPP has been plagued by waste and fraud and that both lenders and a lack of oversight from the Small Business Administration and the Treasury Department are to blame.
The coronavirus economic crisis demonstrated the failure of large banks to reach small and minority-owned businesses, Cathie Mahon, president/CEO of Inclusiv told the Community Development Financial Advisory Board Thursday.
Community Development Financial Institutions stepped up to fill that void as much as they could, Mahon, whose trade group represents community development credit unions, told the board. She added, however, that Minority Depository Institutions and CDFIs were hampered in that effort because they need the capital, technical support, and platforms to keep up with the evolving financial services world.
Credit unions and their members should rely on the Small Business Administration for information about loan forgiveness in the Paycheck Protection Program and ignore what they are reading on social media, David Hincapie, an SBA economic development specialist told community development credit union officials Tuesday.
Financial institutions are not required to share the agent fee they receive from Paycheck Protection Program loans with accounting firms and others who help borrowers apply for the assistance, a federal judge ruled this week. Judge T. Kent Wetherell II of the U.S. District Court for the Northern District of Florida said that unless there is a specific agreement between a company and a lender, federal law does not require the lender to share the fee it receives with the firms. The ruling was made in the case, Sport & Wheat, CPA v. ServisFirst Bank, Inc., in which a small
Borrowers—not financial institutions—are responsible for accurately calculating their payroll costs as they apply for loan forgiveness under the Paycheck Protection Program, the Small Business Administration said this week.