The COVID-19 relief bill passed by Congress and signed by President Donald Trump on Dec. 27, 2020 includes appropriations that will help to ensure that credit unions can continue to support members during the next phase of the pandemic, according to NCUA chairman Rodney Hood.
The Consolidated Appropriations Act, 2021, extends several provisions of the CARES Act, including the Paycheck Protection Program and Health Care Enhancement Act. According to a press release from Hood, provisions in the latest stimulus package include measures that will ensure continued stability and regulatory relief, support community-based financial institutions and aid credit union members and businesses.
Measures that ensure continued stability and regulatory relief. The act extends the CARES Act provisions that provided the Central Liquidity Facility with increased flexibility and borrowing authority to support the liquidity needs of the system and the Share Insurance Fund through Dec. 31, 2021. The act also extends the regulatory relief measures related to troubled debt restructurings and lengthens the exemption from complying with the Financial Accounting Standards Board’s current expected credit losses methodology until Jan. 1, 2022.
Measures that support community-based financial institutions. The act provides $12 billion in COVID-19 relief funding for CDFIs that predominantly serve minority communities, with approximately one-third of the $12 billion set aside for smaller financial institutions with less than $2 billion in assets. It also provides the CDFI Fund with $270 million in supplemental funding. The Community Development Revolving Loan Fund, which the NCUA administers, also received $1.5 million in funding for technical assistance grants and low-interest loans to support low-income credit unions.
Measures that aid credit union members and businesses. The act provides additional support for and extends the through March 31, 2021, with approximately $284 billion set aside for first and second round forgivable PPP loans. There is also a dedicated $15 billion set-aside for PPP lending through community-based financial institutions like CDFIs and minority depository institutions, along with other changes to the PPP program.