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NAFCU's widely read NAFCU Today is credit union leaders' go-to source for the latest on issues impacting the credit union industry. For those short on time, here's a roundup of this week's top need-to-know updates and resources.

Debt ceiling looms over Congress

With Tax Day behind us, the outlook on when the U.S. government can expect to reach its debt limit ceiling is becoming a little clearer. While officials and financial experts anticipated the U.S. to hit its debt limit in August, capital gains tax receipts fell sharply this year and indicate an early June deadline.

House Speaker Kevin McCarthy, R-Calif., Wednesday released legislation to raise the debt limit by $1.5 trillion or through March 2024 – whichever comes first – and cut federal funding by $130 billion in the upcoming fiscal year. It also would repeal $70.9 billion in IRS funding that was allocated for enforcement and operations, as well as rescind certain credits for green energy initiatives. McCarthy plans to bring the proposal to the floor for a vote as early as next week, where Republicans can only afford to lose four members for it to pass. President Joe Biden called the Republicans’ plan a “nonstarter;” Biden and McCarthy met once in February to discuss the debt ceiling and House Democrats Friday urged the president to meet with McCarthy ahead of the bill’s consideration.

In addition to working on a solution to the debt ceiling, lawmakers continue to sort through 2024 funding bills. House Appropriations Chair Kay Granger, R-Texas, said she is aiming for a May markup, with floor votes in June. The spending bills will be impacted by Republicans’ efforts to reduce discretionary spending in exchange for raising the debt limit.

250K consumers’ data breached at CFPB

The CFPB said it suffered a “major” data breach earlier this year when an employee sent spreadsheets containing names and transaction-specific account numbers of 256,000 consumers to their personal email. The bureau learned of the breach Feb. 14 and subsequently fired the employee; it has referred the incident to the inspector general to address.

Rep. Bill Huizenga, R-Mich., who chairs the House Financial Services Subcommittee on Oversight and Investigations, and Senate Banking Committee Ranking Member Tim Scott, R-S.C., have called on CFPB Director Rohit Chopra to provide briefings to lawmakers with details on the scale of the breach, mitigation and remediation efforts, and steps taken to give appropriate notification. Scott raised concerns about the bureau’s ability to protect consumer information amid its section 1071 rulemaking related to small business data collection.

FHLB, PPP loans under scrutiny

Lawmakers are raising the alarm and seeking answers on loans made by the Federal Home Loan Banks (FHLBs) to Silicon Valley Bank, Signature Bank, and Silvergate prior to their collapse, as well as fraudulent paycheck protection program (PPP) loans.

Senate Banking Committee Chairman Sherrod Brown, D-Ohio, called on the Federal Housing Finance Agency (FHFA) to investigate loans made by the FHLBs to the failed banks, noting that “[i]f FHLBank members attempt to use the system as a financial backstop, it could have unintended consequences for the FHLBank System and for our broader financial system.” The banks had almost $31 billion collectively in outstanding loans to the FHLBs of San Francisco and New York.

As the IRS investigates widespread PPP fraud, House Small Business Subcommittee on Oversight, Investigations, and Regulations Chair Beth Van Duyne, R-Texas, sent a letter to Small Business Administration (SBA) Administrator Isabella Casillas Guzman with concerns about the SBA’s failed efforts “to properly investigate and recuperate these fraudulent loans.” Van Duyne noted about 70,000 PPP loans, totaling more than $4.6 billion, had been flagged as potentially fraudulent and requested answers from the agency with details on fraud indicators, efforts taken by SBA to claw back the funds, and full accounting of funds recovered so far.

Lawmakers agree: Stablecoins need guardrails

The House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion held a hearing Wednesday on stablecoins, during which lawmakers agreed prudential regulations are necessary. NAFCU sent a letter ahead of the hearing reiterating the need for clear regulations and supervisory framework, as the current digital assets environment “poses risks to the adoption of these otherwise promising technologies.”

The hearing included discussion on draft legislation that had been floated last year, which NAFCU said was “a step in the right direction.” While lawmakers have indicated a bill would be bipartisan, Republicans and Democrats during the hearing seemed to be disconnected on where things stood. As efforts to regulate cryptocurrencies continue, lawmakers are focused on supervisory structures, a 1-to-1 backing of stablecoins and dollar dominance, protecting against bad actors in the ecosystem, and supporting innovation to ensure the U.S. is competing on a level playing field with other nations.

Share how your CU supports small businesses

Does your credit union have a robust small business lending portfolio? Have you helped a local entrepreneur open a business or expand operations? Credit unions play an integral role in helping Main Streets thrive; National Small Business Week is April 30 – May 6 and NAFCU wants to share your efforts.

For credit unions interested in participating, visit the #NAFCUNation page and fill out the form. To be featured in the campaign, please submit responses by April 28.

In addition, the SBA has resources for the week available online. The agency is hosting a free two-day virtual summit May 2-3 for established and aspiring business owners that will feature educational presentations by experts, networking and mentorship opportunities.