LANSING, Mich., June 3, 2020 — State Rep. John Cherry (D-Flint) introduced House Bill 5826 today to provide relief for tens of thousands of Michiganders by offering bridge loans to those still awaiting unemployment benefit determinations. The legislation would allow the Unemployment Insurance Agency (UIA) to distribute loans to individuals who need immediate support, including those who have been caught in the backlog of UIA cases awaiting the federally required non-monetary employment verification.
“Many Michiganders are suffering through no fault of their own because of the backlog of cases in our underfunded unemployment system,” said Cherry. “While this pandemic has undoubtedly created many obstacles for our communities to overcome, it has also laid bare many flaws that have existed long before the COVID-19 outbreak. The overwhelmed application process made it clear that the department is understaffed and in need of improved technological infrastructure. Those shortcomings must be addressed, but people in our community need help now to continue paying their bills, and this program will provide immediate assistance.”
HB 5826 would allocate $100 million from the CARES Act toward bridge loans. According to the Department of Treasury guidelines, the CARES Act allows for funds to be used for “economic support in connection with the COVID-19 public health emergency.”
“Thousands of Michiganders have been left out in the cold and unable to access the financial support they need to keep a roof over their heads and food on the table for their family during this unprecedented crisis,” said state Rep. Padma Kuppa (D-Troy). “I know how hard that can be, experiencing it first hand after the automotive industry was rocked by the 2008 recession. By bridging the gap between the UIA’s outdated technology and overloaded system, this bill will take the necessary steps to ensure the people of our state have the tools and resources they need to weather this storm.”
“It is clear that the tsunami of claims has left the UIA in shock and unable to handle the workload they have received over the past few months,” state Rep. Nate Shannon (D-Sterling Heights) said. “And while they work through it and build the tools to improve their system, in the meantime, we need to take action to ease the financial burden so many across our state are experiencing while they still wait to receive the unemployment benefits they need to support themselves and their family. This bill would do exactly that.”
The loans offered through this program could be repaid automatically through the recipient’s unemployment benefits once approved or through tax refunds. The bill was referred to the House Committee on Appropriations for consideration.