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Ahead of yesterday's House Financial Services Committee hearing with Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, NAFCU Vice President of Legislative Affairs Brad Thaler thanked Congress and the agencies for their efforts thus far to support credit unions and consumers during the coronavirus pandemic and highlighted additional opportunities to provide more relief.

Thaler specifically discussed the Small Business Administration's (SBA) paycheck protection program (PPP), which is administered in coordination with Treasury, the Fed's actions on Regulation D transfer limits, and the proposed FedAccounts system.

On PPP, Thaler noted that it has "been very successful and an important tool that credit unions have used to help their small business members survive the lockdowns required by the current pandemic." However, he said more needs to be done to help the smallest businesses through the application and forgiveness process and reiterated the association's call that automatic forgiveness be granted for loans under $150,000.

On Regulation D, NAFCU has long called for the elimination of the six-per-month transfer limit from a savings account to a deposit account and, as NAFCU doubled down on this advocacy amid the pandemic, the Fed issued an interim final rule to do so. Thaler said the interim final rule "will provide important relief to credit union members during a time of elevated anxiety and financial stress" and "reduces compliance burdens borne by credit unions." He thanked the Fed for clarifying that it has no plans to reimpose the limit.

On the FedAccounts proposal, which is intended to ensure consumers who might be unbanked or underserved receive economic impact payments (EIPs), Thaler again shared concerns about potential disruptions it could cause to the banking system and recommended improvements to existing delivery mechanisms. He also urged the Fed to dedicate resources to the development of its faster payments system – the FedNow service – and called on Congress to amend the Federal Credit Union Act so all credit unions can add underserved areas to their fields of membership.

During the hearing, several lawmakers questioned Mnuchin on the expiration of the PPP (yesterday was the last day to apply for new loans under the program, but the Senate last night passed legislation to extend it to Aug. 8. The House could pass the bill to keep the PPP open as early as today). Mnuchin said they are looking at repurposing the remaining funds – roughly $134 billion – and that there is bipartisan support in the Senate to get funds out to critically impacted businesses. Lawmakers also asked about the PPP loan forgiveness process, agent fees, the NAFCU-sought hold harmless provision for lenders, and more.

Mnuchin also commented on the important role Community Development Financial Institutions (CDFIs) have played in providing minority communities with access to capital. NAFCU has supported set asides for CDFIs, smaller lenders, and businesses that are women-, minority-, or veteran-owned. 

Rep. Blaine Luetkemeyer, R-Mo., also raised concerns about the current expected credit loss (CECL) standard and Mnuchin and Powell both indicated their support for additional study of the standard's impact.

Other issues that were covered during the hearing included EIPs, credit reporting (the House earlier this week passed NAFCU-opposed legislation that would change credit unions' requirements for reporting consumer credit data), and more.

NAFCU's award-winning advocacy team has maintained constant contact with congressional offices and leaders to keep credit union priorities top-of-mind as lawmakers consider what relief measures are working and what more needs to be done amid the coronavirus pandemic.