NCUA Chairman Rodney Hood identified four areas where statutory changes would improve liquidity, provide capital relief, enhance community lending opportunities and increase credit union access to remote financial services delivery Tuesday in his remote testimony before the Senate Banking Committee. CUNA submitted a letter for the hearing’s record Monday.

Hood’s testimony also included information on NCUA’s response to the pandemic, as well as detailed agency efforts regarding cybersecurity; diversity, equity and inclusion; and the taxi medallion portfolio, among other items.

Hood’s recommendations included those he wrote to Senate Banking Committee Chair Sen. Mike Crapo (R-Idaho) about last month, and fall into four areas:

• Liquidity:
  • Make changes to the Central Liquidity Facility permanent;
  • Grant temporary authority for the NCUA Board to waive the limit (currently 25% of paid in and unimpaired capital and surplus.
• Capital:
  • Temporarily reduce the level at which credit unions are considered well capitalized, from a net-worth ratio of 7% to 6%, and adequately capitalized, from 6% to 5%, during the pandemic;
  • Temporary waiver of net-worth restoration plan requirement for up to 180 days;
  • Temporary increase from $5 million to $100 million for the asset threshold below which the NCUA Board can delegate decisions related to critically undercapitalized credit unions.
• Lending:
  • Temporarily raise the member business lending cap to 20%;
  • Permanently increase the federal credit union loan maturity limit from 15 years to 30 years;
  • Authorize all credit union charters to apply for serving areas designated as underserved, as well as designate Opportunity Zones as underserved areas and allow any credit union located in a designated Opportunity Zone the ability to extend service to businesses and individuals who live or work in the designated area.
• Hood also requested removal, or a significant amendment, of the requirement that if a multiple common bond credit union wants to offer services to select employee groups or associations it must be in reasonable proximity to a credit union service facility.

CUNA supports many of these actions, including the changes to the Central Liquidity Facility, flexibility in handling credit unions that may fall into the 6% to 7% net worth leverage ratio, raising the member business lending cap and raising the federal credit union loan maturity limit.