Credit Union Advocacy in Action During Pandemic Crisis

Capitol building in Sacramento, CA

California Gov. Gavin Newsom signed an executive order on April 23 that exempts garnishment for any individuals receiving federal, state or local government financial assistance in response to the COVID-19 pandemic.

The order also states that no financial institution shall have any lien upon, or any right of setoff, against CARES Act stimulus funds. Funds may be garnished for child support, family support, spousal support or criminal restitution for victims. You can view the governor’s announcement (scroll to bottom).

CA’s UI Work Sharing Program
Employers in California can apply for the Unemployment Insurance (UI) Work Sharing Program if reduced production, services, or other conditions cause them to seek an alternative to layoffs.

The program helps employees whose hours and wages have been reduced to receive UI benefits; keep their current job; and avoid financial hardships. The program helps employers minimize or eliminate the need for layoffs; keep trained employees and quickly prepare when business conditions improve; and avoid the cost of recruiting, hiring, and training new employees.

Request for Immunity from Liability
The Civil Justice Association of California (CJAC) and organizations representing a broad range of California business sectors — including the California Credit Union League — have made a request of Gov. Gavin Newsom to: 1) Issue an executive order extending immunity from civil liability to all private entities and their workers that provide critical services, goods, and facilities during the COVID-19 state of emergency; and 2) Advance and support urgency legislation to address any gaps in this immunity expansion not addressable by executive order.

Doing so would provide greater protection for the state’s industries.

MBL and Paycheck Protection Program
In another effort to aid credit unions in increasing the member business lending (MBL) cap due to the vulnerability of small businesses, 65 bipartisan members of Congress (23 from California and two from Nevada) petitioned their party’s leadership this past week. The coalition sent a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy, asking for an increase in the MBL cap, as well as an increase in the de minimis limit of $50,000.

The California and Nevada Credit Union Leagues greatly appreciate the commitment of these leaders and of Rep. Brad Sherman (D-CA), who last week introduced legislation blocking the cap for three years. Sherman, along with a bipartisan coalition of 16 legislators, introduced H.R. 6550, which prohibits member business loans made during a three-year period from counting toward the MBL cap. The legislation is partially a reflection of the work credit unions have done in serving their communities, including the Paycheck Protection Program (PPP), and the need to provide businesses with affordable access to business lending during the projected economic recovery period.

Co-sponsors of the bill from California and Nevada include Grace F. Napolitano (D-East Los Angeles); Paul Cook (R -Barstow); Julia Brownley (D-Ventura); Jared Huffman (D-Santa Rosa); John Garamendi (D-Vacaville); and Doug LaMalfa (R-Chico).

Privately Insured CUs and PPP
Additionally, Rep. Susie Lee (D-NV), working with a bipartisan coalition of members of Congress, sent a letter this past week to both political party leaders asking for a technical correction to the CARES Act that made access to the PPP difficult for privately insured credit unions.

While a small fraction of credit unions are privately insured, both sides of the political aisle have been adamant that all community based lenders should have the opportunity to provide PPP loans.

The Leagues are grateful for Lee’s leadership on this issue.

Partisan Messaging Bills
Over the last six weeks, members of Congress have used their megaphones to call on industries to accept various practices and have introduced legislation to do so. The Leagues and the Credit Union National Association (CUNA) are very aware of these bills and personalities behind them.

Typically, messaging bills are written to ignite the political base of one’s party and grab headlines at a trying time. These bills are sound bites with little to any chance of become law. They are, however, creating dialogue among their opposition in the media, on social media, and the 24-hour news networks.

If you are concerned about a particular issue or bill, please feel free to email Jeremy Empol, vice president of federal government affairs for the Leagues.

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