The New York Credit Union Association issued a call to action on Friday urging expansion of the Paycheck Protection Program to include all federally insured credit unions as borrowers.
“The CARES Act created the Paycheck Protection Program to incentivize small businesses to retain their staff during the COVID-19 pandemic, and while it permits credit unions to participate as lenders, it prohibits credit unions from borrowing under the program to maintain their own payroll,” Association President/CEO, William J. Mellin said in the message to credit unions.
Credit unions can access a pre-drafted email on the Association’s Action Center that can be addressed to their representatives in Congress (first-time visitors to the Action Center will need to register).
The pre-drafted email encourages lawmakers to “move as swiftly as possible to expand recipient eligibility of Paycheck Protection Program loans to all federally insured credit unions, whether by statute or regulation.”
The letter explains that credit unions are classic small businesses that play a vital role in the American economy. “Nationwide, the average credit union employs just eight people, and has just $33 million in assets. Allowing credit unions to receive Paycheck Protection Program loans will enable these small financial institutions to retain their employees and continue providing financial services during this extraordinary time in our nation’s history.”
Mellin also sent a letter to Jovita Carranza, administrator of the SBA on Friday, stating that the SBA “should move immediately to expand borrower eligibility to credit unions and allow these small businesses to remain part of the economic engine of America during this extraordinary time.”
The Association has been on the frontlines in the push to allow credit unions to participate as borrowers in SBA’s program since the CARES Act was announced on March 27.
“We have been on call after call with members of Congress — many of whom were unaware that credit unions are not eligible to participate in borrowing programs — and with SBA officials, working to get this changed,” said Kendra Rubin, the Association’s vice president of governmental affairs.