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04.02.2020
NAFCU -- SBA to Clarify Coronavirus Relief Eligibility - Credit Unions
NAFCU is calling on the Small Business Administration (SBA) to clarify eligibility for loans under the new paycheck protection program created by the CARES Act for federally-insured credit unions (FICUs) as they – just like other small businesses – "are facing difficult staffing and payroll decisions" in the wake of the coronavirus.

In a letter to SBA Administrator Jovita Carranza, NAFCU President and CEO Dan Berger thanked the agency for its efforts "to ensure that our nation's small businesses can obtain capital and continue paying their employees during this time of hardship." He highlighted that "a majority of FICUs themselves qualify as 'small businesses' as defined by the SBA industry-based size standards."

Berger said it was Congress' intent with the CARES Act to assist all small businesses, including not-for-profits such as credit unions, and the SBA should clarify that eligible recipients under the paycheck protection program include FICUs.

In addition to Berger's letter, NAFCU joined with more than a dozen other trade groups to further bolster its request that cooperative businesses be allowed to participate in the paycheck protection program.

"The harsh economic consequences of COVID-19 do not discriminate by business structure," the groups wrote. "There are more than 65,000 cooperative businesses in the United States facing the same economic hardships as other business models. Collectively, cooperatives generate more than $75 billion in annual wages. It is imperative that cooperative businesses are treated equally with other business structures and able to access the [paycheck protection program]."

The Treasury Department and SBA Tuesday released lender and borrower information for the paycheck protection program. Heeding NAFCU's request, Treasury guidance indicates that all FICUs will be allowed to offer loans under the program, but must apply through an expedited process to become an SBA lender.

All of NAFCU's coronavirus resources can be found here; there are resources specific to regulator actions, and the Phase 2 and Phase 3 relief packages. Contact NAFCU's Compliance Team with any compliance-related questions or concerns; NAFCU's Compliance Blog is also publishing daily, Monday-Friday, with important developments.

Copyright 2020. NAFCU. (link)
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