Legislative Update with Jay Kruse
by Jay Kruse
Chief Advocacy Officer
12/23/2020

Good Morning!

Christmas is only a few short days away! I hope everyone was able to get their last minute shopping and gift wrapping done in preparation for this unique COVID Christmas. I wish you all a Merry Christmas and a Happy New Year and hope everyone is able to relax and recharge in the company of family and friends this holiday season! I think we are all ready for 2020 to be over and done with, but the final month of the year doesn’t seem to be going away quietly.

House and Senate Pass COVID Relief Legislation

Dealing with the threat of a government shutdown and a final push to approve another COVID stimulus package, Congress has been very busy over the last week. On Monday, policymakers revealed a $1.4 trillion omnibus spending bill that would fund the government until October 2021. Attached to and included in this omnibus bill is also a $900 billion COVID relief package. The omnibus funding package was combined with the relief package to require only one vote from Congress in order to speed up the process and get home for Christmas.  The House and Senate were able to pass the measure on Monday sending the package to President Trump’s desk for his approval.

President Trump appears to have other thoughts. In a tweet posted Tuesday evening, the president demanded Congress amend the package to increase the included economic stimulus payments for individuals from $600 up to $2,000. House Democrats have signaled their support and have indicated their intention to try and pass an updated package this week, while the Senate GOP has yet to respond to the president’s comments as of this morning.

Just a reminder as you continue to read through some of the details surrounding this legislation; none of this is official without action by the president, who currently has three options: 1. Sign the legislation; 2. Veto the legislation; or 3. A pocket veto, which means no action and letting the clock run out, forcing Congress to start the process all over again. At this point, all eyes are back on President Trump as he awaits a response from Congress.

Stimulus Funds are Protected

Unlike the first wave of stimulus payments Congress approved earlier this summer, this current package does protect these payments from offset. The bill specifically includes language that protects this benefit, “The right of any person to any applicable payment shall not be transferable or assignable, at law or in equity, and no applicable payment shall be subject to, execution, levy, attachment, garnishment, or other legal process, or the operation of any bankruptcy or insolvency law.”

The intention of these funds is to provide much needed relief to those most affected by the ongoing coronavirus pandemic, and Congress is trying to do everything in their power to ensure these checks, whether $600 or $2,000, have a meaningful effect.

Other Bill Provisions Important to Credit Unions:

  • Language sponsored by Sen. Kevin Cramer (R-ND) that would simplify forgiveness for PPP loans under $50,000. DakCU and CUNA have strongly backed this legislation since it was introduced, advocating and showing automatic forgiveness is more cost-effective for both the government and lenders;
  • Reauthorizing the PPP at $284 billion;
  • Sen. John Thune’s (R-SD) legislation to allow Schedule F filers to calculate their PPP loan award using 2019 gross income rather than 2019 net income given the poor planting season in 2019.
  • A one-year delay of implementation of the CECL standard;
  • Extension of Central Liquidity and Troubled Debt Restructuring relief through the end of 2021. It was originally scheduled to expire Dec. 31, 2020;
  • $12 billion for capital investments in Community Development Financial Institutions and Minority Depository Institutions with $3 billion going directly to loans and technical grants provided through the Treasury’s CDFI Fund;
  • An extension through 2025 of the provision that exempts forgiven mortgage debt from income tax and an extension through 2021 of the deductibility of mortgage insurance premiums; and
  • Amends the CARES Act Employee Retention Tax Credit to include federal instrumentalities like credit unions.

As always, feel free to contact me with any questions or comments.

 

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