Skip to main content

$30 billion of new Small Business Administration Paycheck Protection Loans to banks, credit unions

The Senate on Tuesday passed legislation that would earmark $30 billion of new Small Business Administration Paycheck Protection Loans to banks, credit unions and Minority and Community Development Financial Institutions with less than $10 billion in assets.
Another $30 billion would be set aside for financial institutions with assets of between $10 billion and $50 billion.
The funding is included in the latest coronavirus crisis stimulus legislation negotiated between the Trump Administration and congressional leaders. The Senate passed the bill by unanimous consent. The House is expected to vote on the legislation in the measure Thursday. House leaders are expected to ensure that there is a quorum present to ease the passage of the bill.
President Trump has indicated he would sign the measure.
The bill would provide $320 billion to refill the coffers of the PPP program, which were drained shortly after Congress enacted it.
“This new money puts a special focus on community banks and credit unions,” Senate Majority Leader Mitch McConnell (R-Ky.) said.
“Republicans asked us to funnel money into a program that wasn’t working as well as it could,” Senate Minority Leader Chuck Schumer (D-N.Y.) said.
He said many small businesses that did not have existing relationships with banks were not able to get loans in the initial round of lending.
“If you didn’t know a banker … you were left out,” he said. “You couldn’t get in.”
Critics have alleged that large financial institutions were able to monopolize the first round of PPP lending and charged that loans were made to the institutions’ preferred customers.
For instance, the Associated Press conducted an analysis of recent regulatory filings and reported Tuesday that at least 75 publicly traded companies, some of which had market values of more than $100 million, received loans that were supposed to go to small businesses.
One watchdog group blasted the Trump Administration’s management of the program.
“Whether it’s mismanagement or malpractice, the Trump administration’s failure to allocate funds properly means thousands of small businesses won’t receive the funding necessary to support their employees,” Kyle Herrig, president of Accountable.US, said. “Meanwhile, a bunch of publicly-traded companies worth hundreds of millions got a cash infusion and are sitting pretty.”
Credit union trade groups applauded the Senate passage of the measure.
“At a time where small businesses across the country are struggling to remain afloat, this important legislation will ensure that hard-working men and women across the country will be able to remain financially secure in spite of this pandemic,”  CUNA President/CEO Jim Nussle said.
NAFCU President/CEO B. Dan Berger said he was pleased with the legislation.
“With credit unions processing many SBA loan applications for their members, NAFCU appreciates policymakers responding to our advocacy efforts by setting aside a portion of the funds for credit unions and other community lenders as they are heavily engaged in serving main street businesses and underserved communities,” he said. “These funds are crucial and will further allow credit unions to continue their tireless work in helping their local communities during this uncertain economic time.”

Comments

Popular posts from this blog

Digital Payments Lead the Way Globally: Key Insights from Worldpay Study

According to a recent Worldpay study, digital payments are rapidly becoming the preferred choice worldwide. The research highlights significant shifts in consumer behavior and payment preferences, driven by technological advancements and the growing acceptance of cashless transactions. Key findings from the study reveal that digital payments now account for a substantial portion of global transactions. Mobile wallets, contactless payments, and online banking are gaining traction, reflecting consumers' desire for convenience and speed. This trend is especially prominent in regions like Asia Pacific, where mobile payment adoption is leading the charge. The study also emphasizes the importance of security in fostering consumer trust in digital payments. As fraud concerns continue to rise, businesses must prioritize robust security measures to protect customer information and enhance the payment experience. Moreover, the transition to digital payments is not just about c...

Embracing ARMs And Battling Members’ Misconceptions

With adjustable-rate mortgages back in fashion, credit unions are educating members about the ins and outs of these products, dispelling misunderstandings along the way. With housing stock low, home prices high, and interest rates showing no signs of coming down, many credit unions are turning to adjustable-rate mortgages to help would-be borrowers find a home. ARM loans gained a bad reputation after the 2008 housing crisis and the Great Recession, but credit union leaders insist that with the right education and a clear understanding of how the product works, adjustable-rate mortgages can be an ideal solution for would-be homeowners. The Big Picture53% of those who don’t own a home believe homeownership is out of reach, according to a study from Northwestern Mutual . 58% of millennials feel this way, but roughly half of baby boomers and Gen X share the sentiment. According to Federal Reserve data, the average price of a home topped $510,000 at the end of 2024. That’s 32% higher than f...

Jim Nussle To Retire From America’s Credit Unions

  WASHINGTON—America’s Credit Unions President and CEO Jim Nussle plans to retire from the trade association, ACU announced. ACU said Nussle did not specify an exact date for his retirement but rather expressed his desire to provide the ACU board the “full flexibility” to conduct a search for a CEO over the next several months on a timeline of their choosing, and to ensure his ongoing efforts to champion the organization’s advocacy agenda.   Jim Nussle “Serving credit unions is a deep personal privilege. After a long career in advocacy from both sides of the policy making table, leading CUNA and the honor of helping to create and lead America’s Credit Unions, it is soon time for me to pursue new interests in retirement. My announcement today is intended to provide the board the time to conduct a thorough national search to find the next leader for the Association,” Nussle said.  “My full and ongoing focus will be on our intensive credit union advocacy efforts to prot...

Havoc.’ ‘Debacle.’ Analysts See Rough Road Ahead for Autos With Tariffs

WASHINGTON–What’s known: should President Trump’s tariffs remain in place, new and used vehicle prices are going to get even higher. The unknown: Will members stop buying cars, move from new to used, or given how many buy cars according to payment, move to less-expensive models? The tariffs also may create challenges for credit unions that serve some autoworkers. All of those questions and more remain much in flux with analysts predicting  auto prices could rise by $5,000 to $10,000 per vehicle and wreak havoc on the market as the result of 25% import tariffs on vehicles and auto parts.   As the CU Daily reports separately, however, Black Book believes automakers will spread out the incremental cost of tariffed vehicles across their entire showroom to retain relative vehicle transaction prices. Still, the company expects tariffs to push the average transaction price on vehicles to more than $50,000. ‘A Debacle’ “The tariffs are a debacle of epic proportions for the a...

Zelle Discontinues Standalone App, Shifts Users to Bank and Credit Union Platforms

SCOTTSDALE, Ariz.—The standalone Zelle app is no longer available for sending or receiving money. Users are now encouraged to enroll through a participating bank or credit union’s app to continue using the peer-to-peer payment service, PYMNTS reported. Zelle had announced in an Oct. 31  blog post  that it would make this change, and it completed the move as of Tuesday (April 1), according to a frequently asked questions  page  on its website PYMNTS said/ “More than 2,200 banks and credit unions across the U.S. now offer Zelle through their mobile app or online banking site,” the company said on the FAQ page. “As a result of this growth, in October of 2024, we announced that we are removing the ability for users to send or receive money using the Zelle app starting April 1, 2025.” PYMNTS noted that the page advised users of the Zelle app to visit a “find your bank” page on its website to see if their bank or credit union offers Zelle; to...