As Prepared for Delivery on January 14, 2021
Thank you for your overview, Justin.
In December, Congress compromised on a much need $900 billion pandemic relief package, which includes relief for credit unions and their members. Although we all recognize that more relief and more work will likely be necessary, this bill represents an important step in the right direction. I was happy to work with Congressional offices to help credit unions and their members receive this much needed relief.
The Central Liquidity Facility
My top priority in 2021 is to ensure that the credit union system is prepared to weather any economic fallout related to the COVID-19 pandemic. Credit unions will need liquidity if other parts of the economy freeze up. I appreciate Congress extending the Central Liquidity Facility enhancements to the end of 2021. With these reforms, lending capacity has grown more than fourfold to $32.8 billion since the start of 2020. I strongly encourage all consumer credit unions that do not already belong — or have access to an agent for the CLF — to join and demonstrate the best of the cooperative movement. I was happy to do my part in helping to have this provision added to the pandemic relief package.
The relief package also includes another round of stimulus payments, which can total up to $600 per person, $1,200 per couple, and $600 per child, to support households struggling during the pandemic. Congress provided these stimulus payments to cover food, shelter and medical needs. I was disappointed to read a recent The New York Times reports that some depositories, including credit unions, are now poised to target their members’ economic stimulus payments to pay for past overdrafts. In my view, this not only undermines what Congress intended, but also the system’s mission of cooperative credit, and creates a black eye for the industry. I hope that I don’t read any more stories like that about credit unions again.
Paycheck Protection Program
The pandemic relief legislation also restarted the Paycheck Protection Program (PPP) to help small businesses remain open. In total, small businesses could receive $284 billion through the PPP, with an additional $20 billion reserved for businesses operating in low-income communities. Through the Paycheck Protection Program (opens new window), credit unions are working to save and create jobs. I have personally spoken to many credit unions who leverage the PPP program to help their members. I always like to ask what the smallest PPP loan amount they have extended. To date, the smallest is $627.00. That’s Mom and Pop!
The pandemic relief legislation also included a $9 billion Emergency Capital Investment Program to provide low-cost, long term capital investments to Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs) that are depository institutions, and $3 billion to the CDFI Fund for financial and technical assistance grants to CDFIs. I look forward to working with NCUA staff to implement that program.
Mr. Chairman, I have no further comments.