A number of provisions contained in the massive appropriations and coronavirus relief legislation signed into law Dec. 27 are highlighted by the federal credit union regulator in a letter to credit unions, sent Thursday.
The National Credit Union Administration (NCUA), in its letter to credit unions 21-CU-01, notes that most of the provisions extend portions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law in March as the impact of the coronavirus crisis became apparent. The provisions are extended to Dec. 31, 2021.
More specifically, the NCUA said the provisions in December’s Consolidated Appropriations Act directly affecting credit unions and their members include:
- Extending provisions affecting the agency’s Central Liquidity Facility (CLF, which makes loans to credit unions and the National Credit Union Share Insurance Fund [NCUSIF]) to Dec. 31, 2021. Those include: an increase in the facility’s borrowing capacity (allowing it to borrow $16, up from $12) for every $1 in capital and surplus; relaxed requirements on agent membership (making it more economical for corporate credit unions to join the facility); and extension of liquidity help directly to corporates.
- Suspending the requirement to categorize certain loan modifications related to the COVID-19 pandemic as troubled debt restructurings (TDRs) through Jan. 2, 2022.
- Lengthening the time for compliance with the current expected credit loss (CECL) accounting standard through Jan. 1, 2022 (although federally insured credit unions, the agency notes, are not required to comply with CECL accounting standards until Jan. 1, 2023).
- Authorizing an additional $284.5 billion of more easily forgivable loans through the Paycheck Protection Program (PPP), a loan guarantee program designed to help businesses to continue meeting payrolls during the financial impact of the pandemic. In addition, the December bill sets aside funding for loans by specific institutions: not less than $15 billion for loans by community development financial institutions and minority depository institutions (CDFIs and MDIs), and not less than $15 billion from loans by financial institutions with assets less than $10 billion.
The agency also highlighted provisions in the bill allowing for $1.5 million for its Community Development Revolving Loan Fund (CDRLF) until Sept. 30, 2022; and $12 billion in COVID-19 relief funding for CDFIs that predominantly serve minority communities – with a third of that set aside for smaller financial institutions with less than $2 billion in assets.