September Newsletter
Washington Policy Update
Allison Karakis, Director of Legislative Affairs
In June of last year, 20 candidates took the stage for the first Democratic presidential primary debate. Questions addressed familiar topics, including heath care, foreign policy and the economy. Though experienced candidates knew many unexpected issues would arise before Election Day, it’s safe to say that no candidate anticipated a pandemic which would impact every aspect of daily life.

Six months into COVID-19-related shutdowns, with just over a month until the election, the unexpected continued with the death of Supreme Court Justice Ruth Bader Ginsburg. The impact was felt immediately as elected officials began issuing statements on filling the vacancy, quickly followed by political ads defending those statements. The next week, President Trump announced Amy Coney Barrett as his nominee, officially kicking off a contentious confirmation process with the backdrop of the final month of a bitter election season.
 
Government Funded Through Dec. 11, 2020
 
A government shutdown was averted for now as the House passed a compromise bill to keep the government funded through Dec. 11, 2020, by a vote of 359-57. Democrats secured the inclusion of nutrition assistance which will provide meals to children in schools and daycare, while Republicans secured the continuation of a farm program. It is expected that the Senate will pass the bill with bi-partisan support on Sept. 30, 2020 and that the president will then sign it.
 
Federal Reserve Issues ANPR for CRA
 
The Federal Reserve (Fed) issued an Advance Notice of Proposed Rulemaking (ANPR) in an effort to modernize the Community Reinvestment Act (CRA) and unite the banking agencies on a single approach. This was after the Office of Comptroller of the Currency (OCC) issued a controversial final CRA rule in May that was not adopted by the other banking regulators. The Fed stated, “By reflecting stakeholder views and providing an appropriately long period for public comment, the ANPR advances the goal of building a foundation for the banking agencies to converge on a consistent approach that has the broad support of stakeholders.”
 
American Bankers Association President and CEO Rob Nichols called the proposal an “important step” toward CRA modernization, noting that “we appreciate the Fed’s measured, research-based approach to formulating this critically important rule.”
 
National Housing Conference President and CEO David M. Dworkin said, “In a year where partisanship has tainted every corner of political discourse, this is a refreshing exception.“
 
The ANPR:
  • Proposes assessing large retail banks using a Retail Test and a Community Development Test with separate financing and services subtests.
  • Seeks feedback on what modifications and approaches would strengthen the CRA in addressing systemic inequities in credit access for minority individuals and communities, and proposes special provisions for minority depository institutions as well as women-owned financial institutions and low-income credit unions.
  • Proposes to increase certainty about qualifying community development activities, including through the publication of an illustrative and non-exhaustive list of qualifying activities and a pre-approval process.
 
Click here for the full text of the ANPR. The comment period is 120 days.
 
CDC Issues Eviction Moratorium
 
In September, the Centers for Disease Control (CDC) issued an eviction moratorium for tenants in residential properties through year end.
 
Renters are required to sign a declaration attesting to the eligibility requirements including:

  • Annual income under $99,000 for an individual or $198,000 for a couple.
  • Inability to pay full rent due to substantial loss of household income, loss of hours of work or wages, lay-offs or medical expenses.
  • That eviction would result in becoming homeless, needing to move into a homeless shelter or needing to move into a new residence with people in close quarters.

A large coalition of housing and financial services groups continue to advocate for federal rental assistance to help avoid mass evictions once moratoriums are lifted.
 
PPP Loan Forgiveness
 
The Small Business Administration (SBA) began accepting Paycheck Protection Program (PPP) loan forgiveness applications from lenders on Aug. 10, 2020. More than 5.2 million loans totaling over 500 billion dollars were approved under the program and tens of thousands of forgiveness applications have already been submitted.
 
As of late September, Politico reported that no refunds have been issued. SBA rules provide the agency up to 90 days to respond, but there is growing concern that forgiveness may be delayed or more difficult than anticipated.
 
CBO Long-Term Budget Projections
 
The Congressional Budget Office (CBO) issued its annual Long-Term Budget Outlook that presents projections for the next 30 years based on current laws governing taxes and spending. The impacts of COVID-19 were incorporated in the report.
 
Highlights from the report include:
  • Deficits in coming decades are projected to be large by historical standards. In the projections, deficits increase from 5% of gross domestic product (GDP) in 2030 to 13% by 2050.

  • Federal debt held by the public is projected to equal 98% of GDP by the end of 2020 and 195% of GDP by 2050.

  •  Spending as a percentage of GDP rises in the projections. With growing debt and higher interest rates, net spending for interest nearly quadruples in relation to the size of the economy over the long term, accounting for most of the growth in total deficits.

  • Revenues measured as a percentage of GDP are projected to rise once the effects of decreased revenues associated with the economic disruption, caused by the pandemic dissipate. After 2025, revenues increase largely because of scheduled changes in tax rules, including the expiration of nearly all of the changes made to individual income taxes by the 2017 tax act.
 
Click here to read the full report.