Week ahead: Credit unions call for more relief as Senate returns
With some states beginning to lift stay-at-home orders and the Senate back in Washington – though House lawmakers remain in their home districts – credit unions are pushing for additional coronavirus relief.
Specifically, CUs and their advocates are eyeing funding for both the Community Development Financial Institutions Fund and the Community Development Revolving Loan Fund, additional monies for the Small Business Administration’s Paycheck Protection Program and adjustments to the member business lending cap.
Senators remain widely divided, however, on what relief should look like and how much more should be spent on revitalizing the economy as the deficit continues to expand.
The Small Business Administration released new data over the weekend on PPP loans, noting an average loan size of $79,000 for the more than 3.8 million loans processed since the program’s first round launched. Calls for additional funding continue from a variety of industries, though the Department of Justice has begun probing the program for potential cases of fraud.
“Credit unions are working around the clock, despite website crashes and technical glitches, to ensure their members’ loan applications are processed and their funds delivered to pay employees and meet expenses," Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions said on a call last week with members of the House Financial Services Committee.
As unemployment rises and the pandemic’s economic fallout worsens, industry groups continue to update their forecasts for how the economy might be impacted for the rest of the year and beyond. The latest forecast from the Credit Union National Association predicts a 35% annualized drop in real GDP, largely concentrated during the second quarter, along with increases in delinquencies and charge offs.
This would represent the lowest drop in quarterly GDP since the Great Depression,” said Samira Salem, CUNA’s senior policy analyst.
A report last week from CUNA Mutual Group was similarly grim, suggesting membership growth for 2020 could be limited to just 1%, with only modest gains from there in 2021 and beyond. The firm expects loan growth for this year to drop to just 2%. Card revenue at CUs is also expected to decline significantly in the months ahead.
The Supreme Court resumed work Monday, broadcasting oral arguments live for the first time in its 230-year history. The panel is set to hear arguments regarding the constitutionality of the Telephone Consumer Protection Act this week, which credit unions have voiced concerns about for years. Industry groups suggest rules regarding autodialers could hamper credit unions’ legitimate communications with members.
The Consumer Financial Protection Bureau’s Credit Union Advisory Council is also weighing in on matters remotely, having held a teleconference late last week to discuss a host of matters related to the coronavirus, including consumer complaints as a result of the pandemic, its impact on the marketplace and more.