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The House Financial Services Committee today is set to review the House-passed HEROES Act and prior to the hearing, NAFCU's Brad Thaler outlined ways credit unions are working to provide their members with financial support and relief amid the pandemic and ways Congress can bolster those efforts.

Thaler, NAFCU's vice president of legislative affairs, touted credit unions' programs to protect the financial health of members through skipped payments, waived fees, offering low or no-interest loans, loan modifications and no interest accruals. In addition, he highlighted the industry's participation in the paycheck protection program (PPP).

"Credit unions have also stepped up to ensure small businesses in their communities are taken care of during these uncertain times," Thaler wrote. "The Small Business Administration’s (SBA) Paycheck Protection Program, created by Title I of the CARES Act, has been very successful and an important tool that credit unions have used to help their small business members, and we thank you for including credit unions as lenders in this program. Still, even with the success of the PPP, there remain some issues that we believe need to be addressed such as the simplification of the loan forgiveness process."

Specifically under the PPP, Thaler reiterated the association's call for a simplified loan forgiveness process and automatic forgiveness for loans under $150,000. The HEROES Act would also make some NAFCU-supported changes to the PPP, such as set asides for lenders that are community development financial institutions (CDFIs) and borrowers that own businesses with 10 or fewer employees.

Other HEROES Act provisions Thaler offered support for included:

• increasing the guaranteed portion for existing SBA loans, which are exempt from credit unions' member business lending (MBL) cap and would allow credit unions to make more small business loans;
• increasing the maximum loan amount for SBA 7(a) and 504 loans; and
• providing $1 billion in emergency funding for the CDFI Fund.

Thaler also offered additional proposals to ensure credit unions have the ability needed to support members and businesses recover from the pandemic, including:

• providing relief from the MBL cap and supporting bipartisan legislation to do so;
• amending the Federal Credit Union Act's 15-year general maturity limit for most credit union loans to extend the limit;
• allowing a temporary reduction in credit unions' capital standards on par with what community banks received under the CARES Act;
• increasing funding for the NCUA's Community Development Revolving Loan Fund (CDRLF);
• making changes to the NCUA's Central Liquidity Facility (CLF) permanent;
• modernizing the E-SIGN Act; and
• allowing all credit unions to add underserved communities to their fields of membership.

In addition to offering support for several legislative measures, Thaler cautioned against some of the provisions in the HEROES Act that would provide mandated blanket loan forbearance, place overly broad restrictions on debt collection, make significant changes to bankruptcy law that have not been fully vetted, and alter the credit reporting system that could jeopardize its integrity.

Read Thaler's detailed recommendations here. The hearing is set to begin at 10:30 a.m. Eastern; it will be available via livestream on the committee's website.

NAFCU will continue working with Congress to ensure credit unions' needs and concerns are address in any final Phase 4 relief package enacted into law.