League and CUs share impact, challenges, and opportunity with NC congressional staff
Thursday, June 4, 2020
The League and NC Governmental Affairs Committee members review credit unions' statewide impact with NC congressional delegation staff during Tuesday afternoon's virtual advocacy event.
The Carolinas Credit Union League hosted its latest virtual advocacy event at 4:00 pm Tuesday, June 2, gathering the League NC Governmental Affairs Committee, Credit Union National Association (CUNA) representatives, and staff from North Carolina congressional delegation offices to share credit unions’ continuing support for members and communities and discuss related legislative priorities.
League President/CEO Dan Schline led off “Catching Up with Your NC Credit Unions: A Virtual Visit for Congressional Staff” by summarizing for the twenty-seven participants what North Carolina credit unions have done for small businesses and members in the current environment.
“It’s obvious that the things you have done have had impact,” shared CUNA Deputy Chief Advocacy Officer for Policy Analysis & Chief Economist Mike Schenk in transitioning to his brief economic review and outlook.
Schenk noted that continuing challenges will include roughly one-third of the U.S. labor force being affected by the downturn, and disproportionately those at lower incomes, in rural communities, and among communities of color. He sees unemployment peaking at 25% and lingering at 10% through year-end 2021, with the disruption’s impact at its worst in mid-year.
Yet credit unions entered the downturn in good position, with healthy liquidity and capital, which Schenk called their “war chest” to be used in making a difference in such times, protecting member-shareholder value.
Congressional attention to key issues can further support credit unions and consumers, as League Vice President of Governmental Affairs Evelyn Hawthorne and CUNA Deputy Chief Advocacy Officer for Congressional Relations Eli Joseph noted in leading discussion of current legislative priorities.
Paycheck Protection Program (PPP)
- Allegacy CEO Cathy Pace and Truliant Director of Community Affairs and Business Partner Development Atticus Simpson shared not only their initial challenges including reallocated staff to process applications, but also examples of fulfilling engagement with affected members who through the credit unions’ support had their anxieties eased and were able to stay open, get needed supplies, and keep food on employees’ tables.
- Helpful next steps should include simplification of repayment rules by the Small Business Administration (SBA) and US Treasury.
- Further efficiency can be found in stricter standards for PPP loans of greater than $350,000, with simple attestation for loans below $350,000—the category in which the majority of CU-supported loans fall.
- As the social and economic impacts of the pandemic persist, extending the time to repay PPP loans will further support borrowers’ viability and recovery.
Member Business Lending (MBL)
- Leeway to further support Main Street would be aided in passage of active bills S.3676 and H.6789 to temporarily raise the cap on credit union member business lending (MBL) and extend the sunset to year-end 2021.
- Raising the MBL cap would stimulate the economy nationwide, and North Carolina could see an increase of $174 million in business lending and creation of 1,600 jobs.
- Because research indicates that 80 percent of potential new loans would not be made by banks, an increase of the MBL cap presents virtually no change in bank lending.
NCUA Central Liquidity Facility (CLF)
- With earnings being the sole source of capital for credit unions and member savings, deposits, and loan payments being impacted in the current environment, borrowing from permitted entities like the Central Liquidity Fund is essential to liquidity.
- The CARES Act addressed much-needed expansion of the NCUA’s Central Liquidity Facility (CLF) and its accessibility to credit unions by allowing of corporate credit unions to act as agents for natural person credit unions and expanding the CLF borrowing authority to sixteen-times (16x) the paid-in capital. However, these measures sunset at the end of 2020.
- To better reflect the pandemic and economic crisis and position credit unions for supporting ongoing needs, advocates ask that Congress expand the CLF borrowing authority to twenty-five times (25x) paid-in capital (PIC), extend the expanded borrowing authority until at least December 31, 2021, and make permanent the ability of corporate credit unions to act as agents for credit unions.
“We’ll be in close contact on these and other issues that are vitally important to us. There are challenges ahead, but there is also great work ahead of us,” Schline promised congressional staffers in closing the virtual event. “Credit unions are rightly focused on what they can do to help their members, and to the extent Congress can provide support with some of the issues we discussed today, we will be grateful.”
The League thanks all who participated for their time amid the evolving environment and their continued attention to small business and member support.
- Robert Sneeden, Office of Sen. Richard Burr (R)
- Leigh Whittaker, Office of Rep. David Price (D-NC4)
- Katie Smith and Carly Kilgore, Office of Rep. George Holding (R-NC2)
- Perry Chappell, Office of Rep. David Rouzer (R-NC7)
- Doug Nation, Office of Rep. Patrick McHenry (R-NC10)
- Kichelle Webster, Office of Rep. Alma Adams (D-NC12)
- Tyler Haymore and Francesco Castella, Office of Rep. Ted Budd (R-NC13)
Credit Union Leadership:
- Allegacy CEO Cathy Pace, Executive Assistant Judy Chaffee, and General Counsel Tim Moore (Winston-Salem)
- Champion CU CEO Jake Robinson (Canton)
- ElecTel Cooperative FCU CEO Scott Armstrong (Raleigh)
- Marine FCU CEO Jeff Clark (Jacksonville)
- Summit CU CEO Sam Whitehurst (Greensboro)
- Truliant CEO Todd Hall and Director of Community Affairs and Business Partner Development Atticus Simpson (Winston-Salem)
- Winston-Salem FCU CEO John Jameson (Winston-Salem).
The League continues to monitor the legislative environment and seek similar opportunities for engagement among credit union advocates and elected officials. For questions or concerns on the latest advocacy issues, CCUL Advocacy.