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CRL on New Coronavirus Relief Package

Monday, December 21, 2020

WASHINGTON, D.C. – Today, Congress is set to pass a coronavirus relief package that is crucial and yet falls short of fully addressing the great, pressing needs of a nation in crisis.

Center for Responsible Lending (CRL) Federal Advocacy Director and Senior Counsel Ashley Harrington made the following statement:

As the number of dead surpasses 315,000 and millions of families find themselves at risk of losing their homes, Congress finally presents us with a relief package that is sorely needed. But it is not expansive enough to bring necessary relief and stability to our nation, especially for Black and brown communities that are experiencing the worst health and financial impacts of this unrelenting global pandemic.

The temporary $300 increase in unemployment benefits is a positive development, but more needs to be done to assist low-wage earners struggling from a drop in their income through no fault of their own.

The provision for rental assistance is much needed, but the eviction ban was only extended one month, even as the increase in coronavirus cases is forcing states to return to restrictions to keep the public safe. These temporary supports will not sustain many over the long-term, and families will also see their utility costs increase over the winter months. All families, whether renters or homeowners, must have the emergency relief they need to stay safe and healthy in their own homes through this nightmare as the economy continues to falter.

The bill does include critical improvements to the Paycheck Protection Program (PPP), with set asides for CDFIs and MDIs, and minimum origination fees for the lenders who participate to prevent incentives to serve only the largest businesses. It also provides for the collection of demographic data, important in documenting which businesses are served so disparities can be addressed. And a provision for streamlined forgiveness for small loans will prevent a major debt burden from further threatening many of the mom-and-pop firms that are often owned by Black and Latino families. We also need direct grants to small businesses that will keep them above water; federal support is essential as these communities struggle to recover.

Pulling back funds meant to support small businesses and communities through the Federal Reserve’s credit facilities will hurt struggling small businesses and hamstring the ability of the new administration to help those with the most need without further Congressional action. Long-underserved communities desperately need these funds. Furthermore, the Fed has played an important role in maintaining the health of the mortgage market, however, the support has been uneven, and more needs to be done to ensure affordable refinances are available for low-wealth families, including Black and brown homeowners.

This package leaves out an important provision, the extension of a pause on student loan payments. As the coronavirus death toll climbs and millions of Americans continue to struggle for financial stability, Black and brown Americans are disproportionately bearing the burden of unmanageable student debt.

In fact, the only provision for student debt relief in this package benefits people who have jobs and work for employers who are willing and able to provide student debt support as a benefit. By making student debt relief contingent on having a job and working for a generous, financially stable employer, the bill completely disregards an entire segment of the population. This provision is far from the best or most equitable way to provide relief for struggling student borrowers, especially right now.

The Biden-Harris Administration must extend the pause on student loan payments and must keep its promise to provide substantial, across-the-board debt cancellation to prevent further financial devastation for economically marginalized borrowers and communities.

Congress must commit to immediately providing robust relief monies, especially to those who have no choice but to put their lives at risk as essential workers in order to survive. We have the resources; this is the time to deploy them. Congress has a duty to provide relief that is equal to the enormity of this ongoing catastrophic emergency.

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Press Contact: carol.parish@responsiblelending.org