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Michigan Credit Union League


Families First Coronavirus Response Act | CARES Act | SBA Small Business Support | American Rescue Plan Act of 2021

HEROES Act (CARES 2), H.R. 6800
Initial MCUL Summary

Key Appropriations:

  • $500B in fiscal relief for state governments.
  • $375B in fiscal relief for local governments.
  • $20B in fiscal relief for Tribal governments.
  • $20B in fiscal relief for Territory governments.
  • $755M in fiscal relief for District of Columbia


  • $1B in additional funding for financial and technical support for CDFI.
  • $75B in housing assistance funds for homeowners (mortgage, property tax, insurance, utilities, etc.)
  • $100B in rental assistance (plus roughly $24B in targeted assistance – homeless, seniors, etc.)
  • $10B in additional funding for EIDL.
  • $5.5B in broadband access (hotspots, home connectivity)

Funding for additional EIP payment ($1200/$2400 with dependent amounts, under same criteria) is also included.  It is one time, not a monthly payment as previously discussed.

*NOTE:  This bill contains more appropriations – these are initial highlights of key items of general interest and of interest to credit unionsTotal funding may approach $3T under this measure.

Tax and Process

Garnishments, Offsets, and Child Support:  Economic Impact Payments would be protected from such.  There appears to be good faith coverage for financial institutions.

Payroll Credit for Certain Pandemic-Related Employee Benefit Expenses Paid by Employers:  Provides a refundable payroll tax credit (max $5,000 per employee) for qualified pandemic-related employee benefit expenses paid by employers.

Employee Retention Credit:  Enhances the Employee Retention Credit and permits federal credit unions to claim the Employee Retention Payroll Tax Credit in the CARES Act.

Payroll Tax Credit for Certain Fixed Expenses: Provides a limited 50% refundable payroll tax credit (max $50,000) for employers for half of employers’ fixed costs. The credit is also limited by number of employees and gross receipts.

Federal, State and Local Governments Allowed Tax Credit for Paid Sick and Paid Family Leave:  Permits federal credit unions to claim the paid sick and family leave payroll tax credits in the Families First Coronavirus Response Act.

Consumer and Business Protections and Financial Services

Suspension of Negative Credit Reporting: Suspends negative credit reporting during major disaster periods and prohibits the reporting of negative credit information (except information related to criminal convictions) resulting from consumer “action or inaction” during the covered period.  Requires adverse information to be excluded from credit reports.

Adverse Information on Credit Reports: Requires CFPB to create a website for consumers to report economic hardship related to a disaster to facilitate the removal of adverse information from credit reports.  The CFPB can’t require documentation from the consumer, only a statement that false reporting is subject to perjury.  Information reported by consumers through this website is required to be accessible to CRAs via a database so they can remove covered adverse information.

*NOTE:  This bill contains additional provisions and restrictions related to credit scores and information reporting.

Homeowner Assistance Fund.  Provides $75 billion to states, territories, and tribes to address the ongoing needs of homeowners struggling to afford their housing due directly or indirectly to the impacts of the COVID-19 pandemic by providing direct assistance with mortgage payments, property taxes, property insurance, utilities, and other housing related costs.  Minimum amount per state is set at $250M, with set asides for territories and tribes, and 60% per state must be applied to assist homeowners with equal to or less than 80% of the area median income.  State housing agencies must submit a plan to Treasury for approval and will be responsible for administering amounts disbursed from the fund.  However, they may delegate responsibilities and sub-allocate amounts to CDFIs and other state agencies. 

Temporary Moratorium on Evictions:  Provides for a moratorium from the date of enactment and ending 12 months after that date.  Owners may not file with any court or initiate legal action to recover possession of covered dwelling for non-payment of rent.  Applies to residential leases, or in situations without a lease. After the 12-month period expires, tenants also receive 30 days before lessor can require someone to vacate.

  • Restrictions Begins: Upon enactment of the Heroes Act.
  • Restrictions Ends: 12 months after enactment.
  • Duration of moratorium: 12 months (+30 days for tenants)


Consumer Debt Collection and Foreclosure Moratorium: Prohibits during the pandemic and for 120 days after the end of the presidential declaration of emergency certain actions used in the collection of past due debts.  Limits fees and interest on past due debt amounts and establishes rigid repayment structures after the expiration of the covered period.  Prohibits the use of arbitration agreements for disputes arising out of this section.  Provides for automatic forbearance of mortgages for up to 60 days and allows for extensions (120/180 days).  Other forbearance provisions allow for up to 12 months.  Notably, the definition of “covered loan” appears to remove distinction and expand beyond government backed loans, to include all mortgages.  Repossession activities on personal property (vehicles, etc.) is suspended for 6 months from enactment. 

  • Restrictions Begins: Upon presidential declaration of a pandemic.
  • Restrictions Ends: 120 days following the declared end of the pandemic.
  • Duration: The entire span of the pandemic plus an additional 120 days following the declared end to the pandemic.
  • Automatic Mortgage Forbearance: Begins at the declaration of a pandemic and is valid for up to 60 days with a potential for an extension to bring the total forbearance duration to 180 days.
  • Additional Forbearance Provisions allow for up to 12 months of forbearance during a declared pandemic.
  • Suspension of Repossession of Personal Property: Begins upon the enactment of the Heroes Act and spans 6 months from that point.


Small Business Debt Collection Moratorium:  Prohibits during the pandemic and for 120 days after the end of the presidential declaration certain actions used in the collection of debt related to small businesses (as defined by SBA’s term “small business concern”) and non-profits during a national disaster.  This language mirrors similar language contained in the consumer collections moratorium.

  • Restrictions Begin: Upon presidential declaration of a pandemic.
  • Restrictions End: 120 days following the declared end of the pandemic.
  • Duration: The entire span of the pandemic plus an additional 120 days following the declared end to the pandemic.


Credit Facility for Affected Debt Collectors: Establishes access to a credit facility to make long-term, low-cost loans to debt collectors to recoup costs associated with the suspension of collections.  Provisions are included in the bill related to consumer collections as well as small business collections.

SAFE Banking:  Allows cannabis-related legitimate businesses and their service providers to access banking services and products, as well as insurance. This section also requires reports to Congress on access to financial services and barriers to marketplace entry for potential and existing minority-owned cannabis related legitimate businesses.

Small Business Assistance Provisions

PPP and Small Businesses: Extends PPP covered period from June 30, 2020 until December 31, 2020.  The bill would also do all of the following:

  • Excludes amounts received as forgiveness from gross income for income tax purposes.
  • Permits 501 (c) organizations to borrow under PPP.  Credit unions and other lenders would still be prohibited from borrowing through the program as a result of the financial institution exclusion in SBA regulations.
  • Extends the maximum PPP loan maturity to 5 years (original CARES Act provided 10-year maturity, but the SBA reduced it to 2 years in rulemaking process).
  • Clarifies that PPP loan interest cannot be calculated on a compound, adjustable basis
  • Sets aside 25% of PPP funds for businesses with 10 or fewer employees.
  • Sets aside 25% of funds for nonprofits (of which 12.5% must be used on nonprofits with 500 or fewer employees).
  • Sets aside the lesser of 25% of remaining PPP funds provided in Phase 3.5 or $10 billion, for loans to be issued by community financial institutions.
  • Stipulates that any loan amounts returned to the Treasury due to the cancelation of a covered loan shall be used to guarantee loans to eligible recipients with 10 or fewer employees.
  • Addresses burdens to borrowers deemed ineligible due to prior criminal history
  • Sets aside $1 billion and requires the Treasury Department to use the funds to provide grants to community financial institutions, insured depository institutions and credit unions with less than $10B in assets to ensure these institutions can update their systems (including updates related to Bank Secrecy Act compliance) and efficiently provide PPP loans.
  • Bifurcates the SBA’s traditional 7(a) lending authority from that of the PPP authority to certify the 7(a) lending program continues operation after PPP appropriations run out.
  • Extends loan forgiveness period from 8 weeks to 24 weeks after date of origination or December 31, 2020.
  • Mandates forgiveness data collection and reporting.
  • In terms of PPP loan forgiveness, the bill provides that interest on any other debt obligations incurred before February 15, 2020 and amounts of EIDL loans that were refinanced will be counted as eligible expenditures.
  • Extends the period to rehire employees to December 31, 2020.
  • Holds employers harmless from a forgiveness reduction if they are unable to rehire employees or demonstrate an inability to find similarly qualified employees on or before December 31, 2020.
  • Eliminates the 75/25 rule on use of loan proceeds.
  • Clarifies the hold harmless provision for lenders.
  • Improves coordination between PPP and the Employee Retention Tax Credit to ensure borrowers can take advantage of both types of assistance.
  • Stipulates the SBA shall require SBA 7(a) lenders to provide full payment deferment relief (including principal and interest) for a period of not less than 1 year.

Families, Workers, and Community Support

Emergency Leave Extension:  Extends emergency leave extension to December 31, 2021 from December 31, 2020.

Emergency Leave Definitions:  Changes Employer Threshold from “fewer than 500 employees” and inserts “1 or more employees” meaning public and private sector employees who have been on the job for at least 30 calendar days have the right to take up to 12 weeks of job-protected paid leave under FMLA REGARDLESS of the size of their employer.  “Qualifying need related to public health emergency” with respect to leave is amended to include an employee that is unable to perform duties due to a need to do any of the following:

  • Self-isolate due to diagnosis of COVID-19.
  • Obtain medical diagnosis or care if such employee is experience symptoms of COVID-19.
  • Comply with recommendation or order by a public official or health care provider to self-isolate without regard to whether the order is specific if the physical presence of the employee on the jeopardize their health, health of employees, or an individual in the household of the employee because of possible exposure or exhibition of symptoms.

*Previous provisions remain in place.

Paid Leave:  Workers are to be provided with a full 12 weeks of paid emergency FMLA leave. This leave does not count toward and employee’s 12 weeks of non-emergency unpaid FMLA leave.   The provisions also clarify that it is up to the employee alone to decide if they take emergency FMLA leave concurrently with other paid leave they have available – the employer may not require it.

Wage rate:  Employees are to receive a benefit from their employers no less than 2/3 of their regular pay, up to $200 per day but not less than the applicable minimum wage for the state

Intermittent Leave: Leave may be taken by an employee intermittently or on a reduced work schedule without regard to whether the employee and employer have an agreement with respect to intermittent leave or reduction in hours.

Certification:  An employer may require requests for emergency leave be supported by basic documentation, but not before five weeks after the employee has started the leave (oral or written statement from the employee or from a relevant family member or notice from school, place of childcare, or other caregiver).


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