Credit Union Advocacy
Credit unions are concerned Paycheck Protection Program (PPP) loan forgiveness process is overly complicated.
September 30, 2020 - Credit unions across the nation have made over 170,000 Paycheck Protection Program (PPP) loans to help small business owners pay employees and other necessary expenses during the pandemic. The average credit union-originated loan was around $49,000 with loans being as small as $1,000 or less, a true measure of just how crucial this program has been to Main Street America.
On Thursday, Sept. 24, 2020, Credit Union National Association (CUNA) wrote to the Senate Banking Committee and the House Small Business Subcommittee expressing support for bills that would provide simple forgiveness for PPP loans under $150,000 and called on Congress to enact “commonsense” liability protections for PPP lenders. CUNA is a national organization based in Washington, D.C. that works to provide legislative support to all credit unions and coordinate congressional efforts at State and Federal levels. As part of CUNA, Greenville Federal Credit Union also supports these efforts.
In the letter CUNA writes, “In order to allow America’s small business owners and Main Street financial institutions to remain focused on serving their communities rather than jumping through burdensome regulatory hurdles, we urge Congress to implement policy that provides automatic loan forgiveness for PPP loans. We strongly support H.R. 7777, the Paycheck Protection Program Small Business Forgiveness Act and its Senate companion, S. 4117. This legislation would provide forgiveness for PPP loans of $150,000 or less if the borrower submits an attestation form to the lender. It also ensures that the lender will be held harmless from any enforcement action if the borrower’s attestation contained falsehoods.”
CUNA added that quickly enacting the bill will help small businesses that need the loan forgiveness process to be as simple, cost-effective and efficient as possible.
You can advocate too.
One way you can join in these advocacy efforts is by contacting your representatives and expressing personal support of H.R. 7777, the Paycheck Protection Program Small Business Forgiveness Act and its Senate companion, S. 4117. CUNA has made it easy by providing an online letter template with an automatic email option at their Grassroots Action Center (external link). Individuals can input their contact and home address information and the form will automatically populate the appropriate congressional recipients and addresses.
Tax reform and what it could mean for your credit union.
With recent revelations and increased scrutiny of the current tax system, Congress is turning its attention to comprehensive tax reform. Inside intelligence gathered by the credit union’s legislative team confirms what the press has been reporting: that both the U.S. House of Representatives and the U.S. Senate are already considering new legislation to reform the U.S. tax code. Within the proposed reform is a provision that threatens the entire credit union system: the elimination of credit union federal tax exemption. Greenville Federal Credit Union is calling on your help to ensure the exemption is protected. That’s why it is important to truly understand how credit unions are unique and different from traditional banks and why it is vital that our tax status remains unchanged.
There are key differences between banks and credit unions that make membership in a credit union beneficial.
- First and foremost, credit unions are owned by the members they serve and operate as not-for-profit. Banks report to an outside group of stockholders and must earn profits to pay their stockholders.
- Credit union member-owners elect the persons serving on the credit union board of directors (which are voluntary, un-paid positions) by vote at the annual membership meeting. The individuals on a Bank’s board of directors are elected by the stockholders of the bank and receive salaries for their positions.
- Each credit union member in good standing has equal ownership and one vote, regardless of how much money they have on deposit. Bank customers do not have a vote or voice regarding who is on the board of directors.
A low cost alternative to traditional banking.
When thinking about your credit union it’s important to remember you are an owner, you have a vote and a voice in the process, the services you receive are lower cost and any profits generated are returned to you in the form of dividends. These benefits are all due to how the credit union is structured. These distinctions are what give the credit union its ability to offer the same financial services as a bank, but at a much lower cost to you. A change in our tax-exempt status could affect our ability to be a true alternative to traditional banking.
Sources: Credit Union National Association, www.cuna.org; World Council of Credit Unions, www.woccu.org; Wall Street Journal.
Be an advocate for your credit union.
A simple way to take part is by contacting your lawmakers and expressing your interest in protecting your credit union's tax exempt status.
We encourage all members learn about current legislation affecting our credit union.
Legislative affairs and political action.
Greenville Federal Credit Union is part of the Carolina's Credit Union League and the Credit Union National Association (CUNA), a national organization based in Washington, D.C., and Madison, Wisconsin. These organizations work together to provide legislative support to all credit unions and coordinate congressional efforts at State and Federal levels.