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NAFCU advocacy efforts continue as Thaler shares support of extended TDR relief
NAFCU's award-winning advocacy team is working to share credit union concerns and priorities on key issues, including troubled debt restructurings (TDRs), as lawmakers continue discussions on a Phase 4 coronavirus relief package.
NAFCU Vice President of Legislative Affairs Brad Thaler Friday wrote to House Financial Services Committee leadership to share the association's support of H.R. 7913 – the Financial institution Forbearance Act. The legislation, proposed by House Financial Services Committee Member Blaine Luetkemeyer, R-Mo., extends and expands the TDR relief provisions put into effect by the CARES Act.
Under the CARES Act, credit unions were granted NAFCU-sought flexibility to suspend the requirements to classify certain loan modifications as TDRs, but only through Dec. 31, 2020, or 60 days after the coronavirus national emergency is terminated. Luetkemeyer's bill would extend that flexibility to March 1, 2021 and would direct regulators to not require depository institutions to classify loans as impaired for credit risk until April 1, 2022.
"As credit unions continue to help their members through this unprecedented time, the changes proposed in this legislation will provide important relief that will ultimately benefit credit union members until certain loans are able to perform in normal circumstances," wrote Thaler.
The financial regulators also previously released guidance on the issue to help financial institutions work with borrowers impacted by the pandemic.
NAFCU President and CEO Dan Berger has urged the NCUA to offer further flexibility and relief regarding the anticipated uptick in TDRs due to businesses and consumers being unable to recover in time to resume normal payments within the next six months and NAFCU has requested TDR flexibility be extended to Dec. 31, 2021, as the Senate works on its Phase 4 proposal.
Senate Banking Committee Chairman Mike Crapo, R-Idaho, also included extending TDR relief to Jan. 1, 2022, in a letter to financial regulators outlining ways to help stabilize markets and increase credit, lending, and liquidity.
Additional items NAFCU is pushing for in the package include an automatic forgiveness process for loans under $150,000 made as part of the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and an extension of the CARES Act provisions for the Central Liquidity Facility (CLF). View a comprehensive list.
NAFCU's Virtual Congressional Caucus, happening next month, will allow credit unions to join NAFCU in its advocacy and hear directly from lawmakers and regulators. To help prepare, view pages dedicated to key industry issues, NAFCU's 2020 advocacy priorities, and an infographic on the credit union difference. See the full agenda here.
As Phase 4 relief package discussions continue, NAFCU will keep up its aggressive advocacy to ensure credit union priorities are included in any final legislation.