COVID-19 Update – May 13, 2020
Wednesday, May 13, 2020
Legislative and regulatory updates for credit unions during the COVID-19 Pandemic
Letter to Credit Unions: Establishment of Central Liquidity Facility Agent Memberships – May 12, 2020
Regulatory Alert: Bureau Issues Interpretive Rule on Waiver of TRID and TILA Waiting Periods – May 12, 2020
New PPP FAQs: #46 Regarding Safe Harbor
The U.S. House yesterday introduced the latest iteration of COVID-19-related legislation. The more than 1800-page bill contains a multitude of provisions of note for credit unions. Among many other facets the bill:
- Appropriates $1 billion for the Community Development Financial Institutions (CDFI) Fund, available until September 30, 2021 (see page 33). Section 110701 authorizes $2 billion for the CDFI Fund for fiscal year 2020 (the period ending September 30, 2020).
- Provides an additional $10 billion for Economic Injury Disaster Loan (EIDL) grants
- Permits federal credit unions to claim the paid sick and family leave payroll tax credits in the Families First Coronavirus Response Act.
- Sets aside 25 percent or $10 billion of remaining PPP funds for loans to be issued community financial institutions
- Consumer Debt Collection Moratorium: prohibits during the pandemic (and for 120 days after the end of the presidential declaration) certain actions used in the collection of past due debts; limits fees and interest on past due debt amounts; establishes rigid repayment structures after the expiration of the covered period; prohibits the use of arbitration agreements for disputes arising out of this section.
- Suspension of Negative Credit Reporting: suspends negative credit reporting during major disaster periods; prohibits the reporting of negative credit information (except information related to criminal convictions) resulting from consumer “action or inaction” during the covered period; requires adverse information to be excluded from credit reports.
- Adverse Information on Credit Reports: requires CFPB to create a website for consumers to report economic hardship related to a disaster to facilitate the removal of adverse information from credit reports; the CFPB can’t require documentation from the consumer, only a statement that false reporting is subject to perjury; information reported by consumers through this website is required to be accessible to CRAs via a database so they can remove covered adverse information.
While considering its positive and negative components, it is important to note that this bill, in its current form, has absolutely no chance of passage. Neither the Senate nor the Administration were involved in its drafting, so it serves as more of a marker for the House’s priorities. MnCUN, in partnership with CUNA, will continue to talk with our members of Congress and press for the inclusion of the better parts of the bill and the omission of the most onerous parts.