Trade groups, lawmakers working to offset COVID-19 impact on business

As members of the White House, Congress, and the Senate continue to hammer out emergency funding packages to aid financially struggling consumers, and as reported by ATM Marketplace,ATM operators, as well as small businesses are feeling the pressure,financial institutions and trade organizations are stepping up to provide guidance and support.

The National Association of Federally-Insured Credit Unions is teaming up with the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Credit Union National Association, Financial Services Forum and the Independent Community Bankers of America to respond to a letter from key members of the Senate encouraging financial trade organizations, credit unions and banks to assist members and customers impacted by COVID-19. The letter highlights the variety of services being offered, such as low-to-zero rate loans, deferred credit card payments and fee waivers, as Americans continue to remain at home to prevent further spread of the virus.

The National Credit Union Administration has also provided necessary safety guidelines in a letter of its own, signed by Rodney E. Hood, chairman of the organization. The union group encourages credit unions to assist members by waiving ATM fees, increasing ATM daily cash withdrawal limits, waiving late fees and overdraft fees and waiving early withdrawal penalties on time deposits. Additionally, the organization suggested increasing credit card limits for creditworthy borrowers, waiving late fees for credit cards and loan balances, easing credit terms for new members who qualify, allowing borrowers to defer or skip some payments, and extending  payment due dates which would avoid delinquencies and negative credit bureau reporting. The letter was accompanied by a comprehensive fact sheet to assist with frequently asked questions that credit union staff may encounter.

"We appreciate the NCUA's commitment to providing needed compliance relief in light of COVID-19. Many credit unions are already proactively helping their members weather the COVID-19 storm, and our industry will always be there to assist its membership when they need it most," said Dan Berger, NAFCU president and CEO, in a press release.

SBA and new legislation: Will it help?

As concern continues to grow regarding the financial impact of COVID-19, legislators across the country are working to draft bills to provide necessary and emergency funding.

Senator Marco Rubio, chairman of the Senate Committee on Small Business and Entrepreneurship, has introduced legislation to help small businesses survive during this crisis. If adopted, the proposal would increase the Small Business Administration’s general loan program, known as 7(a), offered by banks nationwide, by $50 billion. The proposal would also ease restrictions on 7(a) loans, allowing the borrower to use the proceeds for payroll support and paid sick leave. If approved, all fees would also be waived for the loans for both the lender and the borrower. In addition, the proposed legislation would provide a 90% loan guarantee for all loans, regardless of size, increase the loan limit for Small Business Association Express from $360,000 to $1 million, and allow the organization itself to determine repayment of its Economic Injury Disaster Loans based solely on an applicant’s credit score.

Legislation is also being proposed by House of Representatives Small Business Committee Chairwoman and New York State Democratic Congresswoman Nydia M. Velazquez, as reported by CNBC. The proposed legislation would provide $25 billion in direct loans for small businesses. Additionally, Senate Minority Leader Chuck Schumer has proposed legislation that would provide $750 billion, with money directly earmarked to assist the small business community.

Despite the strides being made in government for immediate fiscal assistance, there is increasing concern in the financial community that if funding is provided, will the Small Business Administration have the staff, ability or infrastructure to distribute funding to the approximately 7 million small and mid-sized businesses across the country? As the proposals are being discussed, ATM operators and small business owners continue to wait for help.

Ina survey conducted by the National Federation of Independent Business three out of four small business owners are very concerned how COVID-19 will impact business, and more than half have already seen a significant reduction in customer demand for products and services. For these owners, guidelines and support from their trade organizations are appreciated and needed, but time is their biggest concern. How long will their doors remain shut before they can either open again or receive financial help? 

A congressional review of the SBA disaster loan program indicated loan approval and disbursement takes an average of four weeks. Given the current situation for ATM operators and small businesses, that time frame could mean the difference between being just closed down for COVID-19, or being closed down forever.

Click on the link for more information on how ATM Marketplace is following COVID-19.