A relief bill to help the US cope with the impact of Covid-19 was adopted by both the US Senate and the House of Representatives.
The Senate unanimously approved a US$2.2tn emergency relief bill on 25 March, after five days on negotiation. The Congress passed the Bill today by using an unusual procedural move after Representative Thomas Massie (Republican, Kentucky) asked for a recorded vote, which would have forced members to vote in person.
The bill provides direct payments of US$1,200 to millions of individuals who earn US$75,000 or less, and an additional $500 per each child as well as a $500bn fund to help companies and $350bn in loans for small businesses. This will be the third round of coronavirus relief funding.
During the debate, co-operative apex bodies lobbied for co-operatives to have access to funding provided by the bill.
Dan Berger, CEO and President of the National Association of Federally-Insured Credit Unions (NAFCU), said: “We appreciate Congress and the administration acting swiftly to enact relief legislation as we face one of the worst pandemics in over 100 years. As lawmakers consider additional reforms, NAFCU is going to make sure credit unions’ needs are heard, as they must receive greater flexibility and relief so that they can serve their members and help the country out of the economic difficulty posed by COVID-19.”
On 20 March, chief executives from co-operative apex bodies in the USA sent a joint letter to Congress leaders asking them to include co-operatives in Phase 3 of federal disaster assistance responding to the pandemic.
The letter asked Congress to ensure all co-operative businesses are eligible to participate in federal disaster assistance under these emergent circumstances. It also called on the Congress to remove “burdensome regulations” that currently bar co-operative businesses from accessing critical assistance, including at the Small Business Administration (SBA).
“The very characteristics that make co-operatives stronger and more resilient than other business models – that is, their equally shared ownership among all members – is the basis for which SBA denies financing. To ensure that all co-operative businesses can fairly access federal assistance in response to Covid-19, we ask that you require SBA waive the personal guarantee requirement for co-operative businesses, and instead determine eligibility based on past revenue, past and projected cashflow, and assets,” said the letter.
The Phase 3 legislation includes language requested by apex body NCBA CLUSA that specifies the eligibility of all co-operative businesses with 500 employees or fewer and waives the SBA’s personal guarantee requirement on loans of US$200,000 (£169,000) or less.
Furthermore, the bill also makes available Economic Injury grants of up to US$10,000 (£8,452) to be used toward maintaining payroll, meeting increases costs due to supply chain disruptions or making rent or mortgage payments.
The Coronavirus Preparedness and Response Supplemental Appropriations Act signed into law on 6 March provided US$7bn (£5.92bn) in low-interest direct loans to small businesses affected by the economic impacts of Covid-19. However, the act prevents some co-operatives, like consumer co-operatives, to access Economic Injury Disaster Loans.
According to NCBA, the pending legislation would ensure equal access to SBA assistance for all types of co-operatives.
The letter was signed by leaders of 14 apex bodies, including NCBA Clusa, the National Co-operative Bank, the Credit Union National Association, the National Rural Electric Cooperatives Association, National Co+op Grocers, the Neighbouring Food Co-op Association, the Federation of Southern Cooperatives, the National Council of Farmer Cooperatives and the US Federation of Worker Cooperatives.
Around 115 million people in the US are members of at least one of the country’s 65,000 co-operative businesses.