WASHINGTON, D.C.— As Democrats shamefully delay Coronavirus Phase III legislation, House Republican Whip Steve Scalise (R-La.) penned an op-ed for Fox Business arguing that Congress should help small businesses postpone loan payments and federally insure all bank deposits for American families during this period of uncertainty.
While Speaker Pelosi blows up negotiations on Coronavirus Phase III legislation in order to insert completely unrelated liberal policy positions, Whip Scalise argues that common sense measures taken during crises like Hurricane Katrina and the 2008 financial crisis can once again be deployed to mitigate the economic impact of coronavirus on Americans.
Click here or read below for the full op-ed.
The United States faces the worst pandemic in a century as coronavirus spreads domestically and abroad. President Trump, along with mayors and governors, made difficult decisions to restrict public gatherings, reduce international travel, and in some cases, close businesses in order to contain the virus.
While these measures will undoubtedly save lives, they are a major disruption for workers and businesses of all sizes. A public health crisis now risks becoming a nationwide financial crisis.
Families and businesses will need federal help to make it through this period of uncertainty if they are going to emerge in several weeks when we are beyond this shutdown.
Over the past two decades, state and federal legislatures have approved crisis measures to help American workers and businesses endure and recover from both natural and man-made disasters: events like Hurricane Katrina and the 2008 financial crisis required creative solutions, backed by the power of the federal government, to stabilize the economy and preserve jobs and the businesses who create them.
It is time for Congress to deploy these tools again on behalf of the American people.
Both support for small businesses and financial security for American families can be achieved through quick federal action to help community banks. With the inclusion of important provisions in the upcoming Coronavirus Phase III legislation, we should give community banks the flexibility they need to delay loan repayments for small businesses.
This policy, known as “forbearance” can be a lifeline for small businesses trying to get through a crisis.
When Hurricane Katrina hit the New Orleans region in 2005, federal bank regulators including the FDIC let banks push back loan payments for a period of time, which gave small businesses and homeowners crucial breathing room to get their finances in order.
Community banks know local businesses aren’t bringing in any revenue, and they want to help, but the way federal regulations currently operate, these banks can be penalized for modifying loans to help these customers stay afloat.
Congress needs to give financial regulators the authority to temporarily suspend restrictive regulations that are holding them back from offering this “forbearance” lifeline. Community banks should not be punished for simply trying to help their customers, including families with mortgages and small businesses with loan payments, survive and be in a position to reopen and bring back their employees when this crisis is over. Massive loan defaults and bankruptcies will only make matters worse and slow our recovery.
American families, meanwhile, must be reassured that their savings are secure and that they won’t lose access to cash throughout the course of this crisis. To achieve this, Congress must include provisions to federally insure all bank deposits in the Coronavirus Phase III legislation.
This action has precedent – during the 2008 financial crisis, the federal government took similar steps to insure bank deposits nationwide, but Congress restrained the ability to repeat these measures in the Dodd-Frank Act. Congress should once again temporarily provide this insurance coverage.
Short-term relief for families and small businesses through postponed loan payments and financial peace of mind for American families through federally insured deposits: these two common-sense measures will make an enormous difference for the American people over the coming months.
Failure to include these provisions in the upcoming Coronavirus Phase III legislation would represent a lost opportunity to stabilize our financial system nationwide.
We had the world’s strongest economy before this crisis, and with smart, proven relief measures, we can return to an even stronger economy at the end of this crisis. The House and Senate must act quickly.
Together, we will weather this storm.