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NAFCU's award-winning advocacy team is keeping the pressure on Capitol Hill to ensure credit union priorities are addressed in the Phase 4 coronavirus relief package. Thursday, the association sent a letter to Senate leadership outlining specific provisions the industry supports and opposes, including urging inclusion of bipartisan legislation that would ease the forgiveness process for smaller paycheck protection program (PPP) loans.

Of note, NAFCU continues to fight against any efforts to extend interchange price caps to credit cards, arguing that it "would cause irreparable harm to credit unions" and hurt consumers by potentially reducing the availability of credit.

Earlier this week, the Senate began releasing details of its Phase 4 package – the HEALS Act (Health; Economic Assistance; Liability Protection; and Schools Act) – which includes several NAFCU-supported items related to small business lending. Among those provisions are improvements to the PPP, including simplifying the forgiveness application process for smaller loans (similar to what the NAFCU-supported Paycheck Protection Small Business Forgiveness Act would do for loans under $150,000 as well as other changes for loans between $150,000 and $2 million).

The House previously passed its Phase 4 proposal – the HEROES Act – and NAFCU has continued to share its feedback on the bill with lawmakers.

For the Senate's Phase 4 package, NAFCU Vice President of Legislative Affairs Brad Thaler sent a letter to Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y., outlining the association's priorities.

Measures from the CARES Act that NAFCU would like extended or modified include:

• making improvements to the PPP and adjusting the PPP loan forgiveness language proposed in the HEALS Act to match what is in the Paycheck Protection Small Business Forgiveness Act as the House has also had companion legislation introduced;
• making permanent the changes to the NCUA's Central Liquidity Facility;
• extending through the end of the year flexibility related to troubled debt restructurings (TDRs);
• providing parity for the NCUA with the FDIC related to establishing an unlimited maximum guarantee to all shares or deposits held in a federally-insured credit union;
• providing an exemption or extended relief from the current expected credit loss (CECL) standard for credit unions; and
• providing capital flexibility to credit unions on par with what community banks received, which allowed banking regulators to temporarily lower the Community Bank Leverage Ratio (CBLR) from 9 percent to 8 percent.

Additional provisions NAFCU would like added to the Phase 4 package include:

• providing relief from credit unions' member business lending (MBL) cap so they can provide more credit to small businesses impacted by the coronavirus pandemic;
• providing emergency funding for the Treasury's Community Development Financial Institutions (CDFI) Fund and the NCUA's Community Development Revolving Loan Fund (CDRLF), which will allow credit unions to better serve underserved and low-income communities;
• modernizing the E-SIGN Act; and
• limiting liability for essential businesses that remained open during the pandemic to protect them from exploitative lawsuits. NAFCU joined more than 400 groups in support of this provision in a letter to Congress Thursday.

Provisions NAFCU warned against including in Phase 4 legislation as they could hinder credit unions' ability to support members trying to recover from the pandemic include:

• eliminating courtesy pay programs;
• mandating blanket loan forbearance;
• placing overly broad restrictions on first-party debt collection;
• disrupting the integrity of the credit reporting system;
• making major changes to bankruptcy provisions; and
• allowing big tech to enter the financial services industry without proper oversight or regulations.

NAFCU will continue its aggressive advocacy to ensure credit unions' needs are included in any final legislation.