Week ahead: New PPP funding could fall short of demand
Credit unions will start the week hoping to make the most of the latest round of a federal relief package signed by President Trump on Friday.
Chief among those measures is an additional $320 billion in funding for the Small Business Administration’s Paycheck Protection Program, which reopened Monday morning. The program’s initial $349 billion ran out in less than two weeks, and there are concerns the second round could move just as quickly.
One advantage for credit unions this time around is the $60 billion set aside for smaller lenders, with $30 billion earmarked for banks and credit unions under $50 billion in assets and an additional $30 billion for lenders under $10 billion. That leaves less than a dozen credit unions ineligible for those specific funds, though some of the nation’s largest CUs didn’t participate in the first round of PPP and it’s unclear if those institutions’ plans have changed.
Some lawmakers are continuing to urge Congress for an additional injection of funds so the program can continue throughout the pandemic.
Congress is still gone from Washington and not expected to return until sometime next week at the earliest, though that could change.
Credit unions are also starting the week assessing new rules from the Federal Reserve. Last week the Fed lifted its six-per-month transaction limit on savings accounts.
The Federal Open Market Committee will meet for two days starting on Tuesday, though traditional monetary policy measures are expected to be on hold as the Fed evaluates a host of lending programs and other initiatives aimed at alleviating the economic strain induced by COVID-19.
Credit unions, meanwhile, have new tools at their disposal for boosting liquidity, after Congress and the National Credit Union Administration approved temporary changes to the Central Liquidity Facility. As reported, it remains to be seen if the CLF – believed to be less popular than the Fed’s discount window or the Federal Home Loan Bank System – can compete with better-known options. Industry groups are also pushing for delaying the current expected credit loss standard’s effective date for credit unions until at least 2024, more widely permitting remote notarization and more.
Lastly, voters in Ohio have the option of turning out to the polls tomorrow for the state’s primary election. Originally scheduled for March 17, the primary was rescheduled until Tuesday and required a majority of voters to send in absentee ballots. Congresswoman Joyce Beatty’s seat is up against Morgan Harper, a former staffer at the Consumer Financial Protection Bureau.
"We anticipate that Congresswoman Beatty should prevail when all the votes are counted, but nonetheless it's one [race] we're watching very closely," said Trey Hawkins, deputy chief advocacy officer for political action at Credit Union National Association.