Why Credit Unions Should be Concerned About The HEROES Act   

May 15, 2020 at 9:07 am Leave a comment

From the credit union perspective, what is most noticeable about the HEROES Act is not what’s in the bill, but what is not.  Despite laying out more than 1,800 pages of priorities, as noted by David Baumann in his excellent article, House Democrats did not include any of the industry’s priorities including PCA flexibility, extending the duration of amendments related to the Central Liquidity Fund or expanded authority for MBL loans.

What’s more, there is plenty in the bill to keep credit union executives worried about unpaid mortgages up at night.  Section 4204 would grant “automatic forbearance” to any borrower whose mortgage has become 60 or more days delinquent since March 13th.

If the conventional wisdom is correct, the house bill has about as much chance of becoming law as Donald Trump does of becoming an epidemiologist.  Still, the industry should consider this bill a warning shot.  The real threat to the continued growth of the industry does not come from the bankers.  It comes from the liberal younger base of the Democratic Party which, rightly or wrongly, is becoming increasingly dissatisfied with the efforts made by credit unions to help people of modest means.

Increasingly, the party is looking to CDFIs which is why the news is not as bad for you if you are one of the approximately 300 credit unions which are Certified Development Financial Institutions.  The bill includes $1billion in funding for the CDFI fund.

Entry filed under: COVID-19, Economy, General, Political. Tags: , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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