CUs and Employees Urged to Join ‘NO on AB 2501’ Campaign

Government capitol building steps

Assembly Bill 2501 in the California State Assembly remains a threat to the credit union movement — and the California Credit Union League needs your immediate help to defeat it. The bill requires credit unions to offer inflexible lengthy forbearances on mortgages up to Jan. 1, 2022 and lengthy forbearances on auto loans. It would significantly draw down levels of capital, preventing credit unions from serving their communities and potentially causing layoffs or even mergers.

The League is requesting credit union staff to take one minute and participate in the “NO on AB 2501” campaign.

As of Friday morning, only 1,700 messages had been sent to state legislators across California opposing AB 2501. The League needs at least 10,000. Credit unions' participation is critical. Every credit union employee should act today. Defeating AB 2501 is crucial to the survival of every California credit union, as they will see their capital quickly erode if AB 2501 is passed.

Credit union leaders have been asked to direct their colleauges and staff to the webpage to sign up and send a message to their assemblymembers TODAY.

The League has made immense progress so far in highlighting credit union concerns with some legislators, but credit unions must keep this momentum going. If you have questions on AB 2501, please reach out to League Vice President of State Government Affairs Robert Wilson. For other questions or issues with Connect for the Cause, please contact League Advocacy Specialist Emily Udell.

Assemblymembers Request Deferment of DBO Expansion
Several California assemblymembers have sent a letter to Speaker Anthony Rendon and Budget Committee Chairman Philip Ting requesting reconsideration of two items as they help craft California's 2020 – 2021 budget.

One of the requests is a deferment of the proposal to restructure the Department of Business Oversight (DBO) as the Department of Financial Protection and Innovation. A deferment will allow appropriate committees to evaluate details and potential ramifications, as well as seek opinions from policy experts, advocates and the public.

Update on Equifax Data Breach Settlement
The California and Nevada Credit Union Leagues are pleased to inform credit union leaders that the court overseeing the Equifax data breach matter has granted our motion to preliminarily approve the settlement. The settlement provides that class members may seek compensation of $4.50 per alerted on card and up to $5,000 for any documented out-of-pocket costs and fraud associated with the data breach.

Credit unions will be updated as the status of the settlement progresses, including once a notice is sent by the settlement administrator. The settlement administrator will be sending credit unions a notice regarding the settlement, along with information about how to file and submit a claim either electronically or via U.S. mail.

The Leagues would like to thank credit unions that were impacted by this data breach for their continued patience in this matter.

Latest PPP Bill Signed by the President
H.R. 7010, which updates the terms for Paycheck Protection Program (PPP) loans, has been signed by President Donald Trump.

Under the new law, PPP loans can be forgiven for borrowers that pay eligible payroll expenses or make other covered payments for mortgage interest, rent, or utility costs incurred over 24 weeks (an increase from 8 weeks). The bill would extend the PPP loan forgiveness period to Dec. 31 if businesses restore staffing or salary levels that were previously reduced; require businesses to spend at least 60 percent of their PPP funds on payroll expenses to qualify for full loan forgiveness (instead of the current 75 percent rule); and allow for other items that apply to forgiveness.

Here is a detailed analysis from Bloomberg Government.

Requesting Changes to PPP Forgiveness Process
The Credit Union National Association (CUNA) and the California and Nevada Credit Union Leagues have sent a letter to Treasury Department Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza recommending that the PPP loan forgiveness process be revamped and simplified.

Credit unions are concerned that the recently published application for loan forgiveness is overly complex for most businesses, especially small business owners with fewer resources, creating additional burdens and costs. Credit unions are also concerned that borrowers may rely on them for assistance in checking whether their businesses have properly calculated forgiveness amounts. Credit unions should not be relied on by borrowers to help complete applications — a serious undertaking.

CU Perspective During Civil Unrest
History was made this past week. The Leagues are reminded of Martin Luther King, Jr.’s “The Other America” speech in 1967, where he said “riots are socially destructive and self-defeating... but in the final analysis, a riot is the language of the unheard.” May his words cause us to pause and consider what is happening around us as we reflect on all viewpoints of this civil unrest.

Credit union leagues across the nation were encouraged by a special message received yesterday from Minnesota Credit Union Network President and CEO Mark Cummins as he discussed this moment. Cummins and many of his association’s credit unions stand at the heart of today’s turmoil, and the communities they serve are rising each day to mend the destruction from riots and heal wounds.

The Leagues applaud everything credit unions are doing to serve their members right now. The Leagues remain committed to serving credit unions.

Congressman Aguilar on League Call This Week
During the Leagues’ weekly call on Thursday, Rep. Pete Aguilar (D-CA) joined in to discuss multiple questions about Congress, operations, where things are going, and the overall state of government. Congressman Aguilar is vice chairman of the House Appropriations Committee and member of the subcommittees on Homeland Security and Defense.

The Leagues and credit unions would like to thank the congressman for taking the time to discuss important issues in Washington, D.C.

CU Difference Highlighted in ‘Dollar Scholar’
As credit unions continue serving their communities during the COVID-19 pandemic and recent social turmoil, the credit union difference is still being spotlighted. Carrie Birkhofer was given a voice in Dollar Scholar, a highly-read financial education blog by Birkhofer is CEO of Bay FCU, which serves Santa Cruz, San Benito and Monterey counties.

Birkhofer illustrated the difference between a credit union and bank very well, and she promoted (the “Open You Eyes to a Credit Union” Awareness Campaign). The Leagues appreciate the hard work of Carrie and so many other credit union professionals as they continue doing what is best for their communities during this difficult period.

Weekly Update: CA and NV Credit Union COVID-19 Relief
According to weekly survey data collected by the California and Nevada Credit Union Leagues from late March to early June, credit unions in both states have accomplished the following for their members:

  • Nearly 560,000 members have been provided financial relief.
  • Over 547,000 extensions made on nearly $15.1 billion in member loans.
  • Approximately $72 million provided in emergency loans to members.
  • More than 2.6 million fees waived for members.
  • $1.35 billion employee/business loans made via the Paycheck Protection Program (PPP) loans from the Small Business Administration and Treasury Department’s federal relief program.

While credit union data in both states is still being gathered every week, the Leagues' ongoing COVID-19 Impact Survey continues to track how credit unions are assisting consumers during the economic fallout from the Coronavirus pandemic and which ones are participating in the SBA’s PPP funding efforts.

The data represents a great majority of credit unions in California and Nevada, but not all. The Leagues are encouraging credit unions at the beginning of each week to complete the survey by sending CEOs a link. The numbers continue helping the Leagues tell a powerful, compelling story about the impact credit unions are making in their communities.

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