In a recent interview in Habitat Magazine, Senate Majority Leader Chuck Schumer described the fight to include housing co-ops as eligible borrowers under the Paycheck Protection Program and the support in Congress for co-ops.
“I had to fight and fight and fight” to get co-ops eligible for Paycheck Protection loans, Schumer said.
The CARES Act established the Paycheck Protection Program—loans administered by financial institutions, guaranteed by the U.S. Small Business Administration, and eligible for 100 percent forgiveness to borrowers.
While it was clear many cooperatives were eligible right away, certain co-op sectors faced uncertainty. In April, the Treasury Department issued rules clarifying that electric, farmer, and telephone cooperatives were eligible.
NCBA CLUSA led a coalition letter joined by other leaders in the co-op community urging Treasury and the Small Business Administration to provide a similar clarification for housing cooperatives, but guidance was never issued.
Although the House-passed HEROES Act included a provision to ensure housing co-ops were eligible, the bill did not advance through the Senate.
Schumer said he heard from cooperators in New York, “And they explained that during the pandemic, co-ops were hurting just like other small businesses were hurting, and with everything going on, it was harder to keep their employees.”
This effort crossed the finish line in December 2020 when the Economic Aid Act passed and was signed into law, including a provision expressly listing housing cooperatives as eligible PPP participants.
“It is a major sea change. It’s the first time that housing co-ops were recognized for their importance and vitality. I was able to get legislators who didn’t know about housing co-ops to come on board to help me. And I think it’ll be a change that will work in the future.”
Senator Schumer assured that the cooperative community has a support in him. “I’m a cooperator myself, have been since 1982,” he said.