Legislative Update with Jay Kruse
by Jay Kruse
Chief Advocacy Officer
7/8/2020

Good Morning!

 

I hope everyone was able to get out and enjoy a fun and relaxing 4th of July! The hot and humid weather was perfect for a day on the water followed by a perfect night for fireworks viewing. In my mind the holiday couldn’t have come at a better time, allowing many here in the Dakotas to get out of the house and spend some much need time with family and friends that have been social distancing for the past 3 months.

 

While they’re not quite on “vacation,” neither the House nor Senate will be in session again until July 20th. The House will use these days as committee workdays, while the Senate will use the time as an in-district state work period. Last week, prior to the break, Congress was able to pass a bill that extended the June 30th deadline for applying for Paycheck Protection Program (PPP) loans to August 8th, which was quickly signed into law by President Trump.

 

There are still approximately $130 billion in unspent PPP funds, and based on my conversation with credit unions across the Dakotas, PPP applications continue to be submitted. While credit unions and other financial institutions continue to provide access to PPP funds, the SBA and Treasury have recently released loan level data for loans over $150,000 and aggregate data for loans under $150,000. You can access and take a closer look at all the data on the Treasury’s website here.

 

CARES Act 2.0

 

When the House and Senate return to session in late July, I anticipate negotiations on the next phase of recovery/relief legislation, which are currently taking place behind the scenes, to really heat up. Over the last few weeks, discussions and reporting has focused on new provisions and the next wave of stimulus that could be included in an update to the CARES Act. However, we can’t forget about the many looming deadlines that many of the CARES Act provisions carry. There is a wide range of deadlines included in the legislations, but many, if not most provisions reference December 31, 2020.

 

While that may seem like plenty of time for Congress to access the effectiveness and importance of each provision included in the original CARES Act, we have already begun to discuss the possible need for extensions on a range of provisions important to the financial stability and overall financial wellbeing of our local communities.

 

We are currently advocating for the extensions of provisions relating to:

 

1. NCUA Share Insurance

2. Troubled Debt Restructurings (TDRs)

3. Central Liquidity Facility (CLF)

4. Current Expected Credit Losses (CECL)

 

There are many other provisions affecting and important to credit unions that will require more of a “wait and see” approach before determining the need for a deadline extension. We will continue to monitor and engage our elected officials through the 3rd and 4th quarters as we access how our members and this country as a whole are recovering from this COVID-19 pandemic.

 

Have a great week, stay well, and don’t hesitate to contact me with any questions.

 

Jay

 

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