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The CARES Act Unpacked

Everything You Need To Know About the COVID-19 Stimulus Plan

After days of negotiations and last-minute changes, the Senate and the White House have signed a historic $2 trillion stimulus plan to help mitigate the economic fallout of COVID-19. The Coronavirus Aid, Relief and Economic Security Act (CARES) will put cash directly into people’s pockets, provide desperately needed funding for hospitals and help struggling businesses remain afloat in these financially fragile times.

Here’s all you need to know about the CARES Act.

Stimulus checks

One of the most crucial elements of the bill is the plan to distribute stimulus checks to Americans in the middle class and lower income levels. Officials hoped to deposit the one-time payments as soon as early April, though Americans likely won’t see the funds until a few weeks later.

Aid amounts will be based on household income reported in 2018 taxes (or 2019 taxes if they’ve already been filed), and will average $1,200 for each adult earning up to $75K a year and married couples earning up to $150K a year. Check amounts will begin to phase out for individuals whose income exceeds the $75K threshold, and for couples who earn more than $150K. Individuals earning more than $99K, and couples with no dependents earning more than $198K, won’t receive stimulus checks. Each household will also receive an additional $500 for every child under the age of 17 living at home. You can look up your anticipated check amount on this calculator.

The feds are hoping the stimulus checks will help the floundering economy and be a welcome relief to the millions of Americans struggling with a job loss or decreased hours due to COVID-19. The checks will provide benefits quicker than a tax credit and offer more spending freedom for recipients.

Increased unemployment benefits

The enhanced unemployment insurance includes four months of unemployment pay for laid-off workers; expanded coverage for employees who were furloughed; the inclusion of workers who generally do not qualify for unemployment, like gig workers and freelancers; and increased unemployment benefits for all eligible workers by $600 a week for four months in addition to each state’s predetermined unemployment compensation.

Funding for the health care system

The stimulus plan will pump $150 billion in the country’s overtaxed health care system to help it

meet the overwhelming demands of the pandemic. Of this funding, $130 billion will go directly to hospitals struggling to deal with a shortage of masks, ventilators, beds and protective gear; and $1 billion will go to the Indian Health Service. The rest of the money will be used to fund research and treatment and to help the Strategic National Stockpile raise supplies of ventilators, masks and other equipment for hospitals across the country.

Small business bailouts

Small businesses are among the hardest hit by the pandemic and national shutdown to help “flatten the curve.” The stimulus plan will offer $350 billion worth of funds to these corporations to help them remain solvent during these economically lean times. These funds take the form of loans, some of which may ultimately be forgiven.

Funding for state and local governments

State governments are especially active and vocal at this time, as they are the sole elected officials authorized to enact and enforce lockdowns on their jurisdictions. State treasuries are also straining to meet the surge in requests for funding from hospitals and individuals seeking unemployment benefits. Local governments are similarly mobilized during the pandemic, with law enforcement authorities in heavily infected areas putting in long, hard hours daily ensuring the safety and health of citizens.

The CARES Act will distribute $150 billion directly to state and local governments to enable them to address their spending shortages and to fund their increased labor at this time.

Retirement Plans

The act calls for waiving the 10% early withdrawal penalty for distributions up to $100,000 for purposes relating to COVID-19, retroactive to Jan. 1. Withdrawals still will be taxed; however, taxes are spread over three years, or taxpayers have the three years to roll it back over.

In addition, the loan limit for 401(k) loans has increased from $50,000 to $100,000 and required minimum distributions (RMDs) from IRAs and 401(k) plans (at age 72) are suspended.

Student Loans

Federal student loan borrowers will be allowed to pause payments on their loans. Loans will be put into forbearance for at least 60 days starting March 13, 2020. No payments should be due until after Sept. 30, 2020.

Federal student loan interest rates will automatically be set to 0% for a minimum period of 60 days until Sept. 30, 2020. If borrowers continue making payments, the full amount will be applied to the principal.

Borrowers do not need to take action to suspend loan payments. In addition, collection efforts, including the garnishment of wages and the seizure of tax refunds, will be suspended on federal student loans that are in default.

Mortgages

Some homeowners could be able to pause payments for at least six months with the possibility of an additional six months of forbearance, according to the act. Homeowners become eligible if they have one of the following types of mortgage loans:

  • An FHA Loan
  • A VA Loan
  • A USDA Loan
  • An 184/184A Mortgage
  • Any mortgage backed by Fannie Mae
  • Any mortgage backed by Freddie Mac
  • Missed payments would be required to be paid back; however, homeowners can work with their lenders at the end of the forbearance period to come up with a manageable payment plan. A moratorium on foreclosures for borrowers with any of the above types of government-backed loans began March 18.

Additional provisions and addenda

There are several other components of the CARES Act, including the following:

  • Establishment of a Treasury Department special inspector general for pandemic recovery and a Pandemic Response Accountability Committee to oversee loans to businesses
  • Prohibition for all businesses controlled by the president, vice president, members of Congress and heads of executive departments from participating in the loan or investment programs. Their children, spouses and other relatives are also banned from receiving benefits.
  • Provisions to ban stock buybacks during the period of government assistance. There is an additional ban of a year for all companies receiving a federal loan from the CARES Act
  • Establishment of worker protections for businesses receiving the federal loans
  • Prohibition for airlines from using the federal loans for CEO bonuses

The country is going through historically challenging times, but with the combined effort of the federal government, the cooperation and compliance of the public and generosity of each individual, we can all get through this together. Wishing all of our members and their families continued health and safety at this time.

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  • How can I access my Listerhill accounts without a nearby branch?

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  • The Great Giveback Official Rules

    1. Eligibility: No purchase or obligation necessary to participate and win. All participants must be 19 years of age or older at time of contest participation. Employees of Listerhill Credit Union are not eligible to register for the contest.

    2. How To Enter the Contest: All Listerhill members who have consumer loans in good standing, (subject to limitations below) are automatically entered. Anyone who takes out a new loan with Listerhill Credit Union, or refinances a loan from another lender with Listerhill Credit Union (subject to limitations below) will automatically be entered to win. Limit of one entry per loan.

    NO PURCHASE NECESSARY: To enter the contest without a loan, send a self-addressed, stamped envelope to: Listerhill Credit Union, P.O. Box 566, Sheffield, AL 35660, Attn: Great Giveback Contest Entry. Limit one entry per person. Written entries must be received no later than July 3, 2021.

    Listerhill Credit Union will not be responsible for incomplete, lost, late, misdirected or illegible entries or for failure to receive entries. All entries become property of Listerhill Credit Union and none will be returned. Any questions regarding the number of entries submitted shall be determined by Listerhill Credit Union in its sole discretion, and Listerhill Credit Union reserves the right to disqualify any entries by persons determined to be tampering with, violating, or abusing any aspect of the contest.

    3. Contest Entry Requirements: In the event the Credit Union, in its sole discretion, determines that any Entry contains content that does not comply with these Official Rules or does not otherwise comply with regulatory guidelines, Credit Union reserves the right to disqualify the entry.

    4. Determining the Winner: A Credit Union employee will select at random four (4) $500 winners (one per day July 12-15) and one Grand Prize Winner from all entries received on July 16, 2021. You do not have to be present to win.

    5. Prizes: $500 Cash Prize: the Credit Union will award four (4) members with $500 cash each. Grand Prize: The Credit Union will pay up to $25,000 toward your loan with Listerhill Credit Union, or combination of loans. No loan payments will be made to loans with any other lender. No cash equivalent provided, and the total prize amount may be less depending on the outstanding amount of loan balance(s) with Listerhill Credit Union. In no event will the prize awarded exceed the total amount of the winner’s outstanding balance of qualifying loans with Listerhill Credit Union. Federal, state and local taxes are the sole responsibility of the winner. IRS regulations require the Credit Union file a 1099 on behalf of the winner.

    A Credit Union employee will call the prize winners and the prize winners will be called up to five times during regular business hours at number provided on entry form and will leave no messages. Failure to reach winner during these calls may result in disqualification of winner, forfeiture of his or her interest in all prizes, and selection of a substitute winner drawn from the drum. Winner will be required to schedule a time, at least 48 hours in advance, to visit Listerhill Credit Union, located at 4790 2nd Street, Muscle Shoals AL, 35661 in person, during regular business hours within seven (7) days of being notified to claim prizes by providing proof of eligibility for prize won and completing and signing an affidavit of eligibility and a liability and publicity release. Failure of any Winner to timely contact the Credit Union, visit the above Credit Union office in person and sign and return any required affidavit and release, or to claim a prize or comply with any term or condition of these Official Rules, will result in drawing Winner's disqualification and the forfeiture of his or her interest in the prize. Winners may waive their right to receive prizes. Prizes are non-assignable and nontransferable. No substitutions allowed by winner.

    6. To be eligible to win, all loans must be in good standing (not more than 30 days past due at the time of drawing. Eligible loans are limited to auto loans (no indirect dealer loans), personal loans (no loans secured by real property, such as mortgages, 2nd mortgages, and Home Equity Lines of Credit) and recreation loans made to consumer borrowers (not business or commercial loans).

    6. Participation. By participating, entrants agree to be bound by these Official Rules and the decisions of the Contest. Except where prohibited, acceptance of any prize constitutes winner's consent to the publication of his or her name, biographical information and likeness in any media for any commercial or promotional purpose, without limitation the Internet, or further compensation. Prizes not won and claimed by eligible winners in accordance with these Official Rules will not be awarded and will remain the property of the Credit Union.

  • How do I redeem my Merchandise Rewards?

    The easiest way to redeem your Merchandise Rewards is to log into Listerhill’s Online Banking and click the “Get Info” link to the right of your credit card information. This will take you to our credit card servicing site within the same window. Select “Rewards” on the upper right side within the screen (below FICO Score) and on the next screen, click on the CURewards logo. This will automatically sign you in to be able to redeem your Merchandise Rewards points!