CUNA supports NCUA’s Interim Final Rule on asset thresholds, believing it will provide certain large credit unions substantial regulatory relief. CUNA submitted comments on the Interim Final Rule Monday, which became effective March 23.

The Interim Final Rule allows a credit union to use March 31, 2020, financial data when determining whether it is subject to capital planning and stress testing requirements under NCUA’s regulations and supervision.

“Complying with these more stringent regulatory standards would impose additional transition and compliance costs on credit unions that otherwise may not have become subject to these requirements at this time,” the letter reads. “Given the rapid and unexpected nature of credit union asset growth in 2020, many credit unions are unlikely to have planned for these transition costs. The IFR gives affected credit unions more time to either reduce their balance sheets, or to prepare for higher regulatory standards.”

CUNA’s analysis also shows that, if NCUA were to modify the Interim Final Rule to permit credit unions to use the March 31, 2020 asset data for the March 31, 2022 measurement date, several other credit unions could receive the same relief that several have experienced with the current Interim Final Rule.

“We believe such an extension is appropriate, particularly since the NCUA has acknowledged that the balance sheet growth related to the pandemic is unlikely to have significantly increased the general risk profile of the affected credit unions (i.e., those that crossed the $10 billion asset threshold between March 31, 2020 and March 31, 2021),” the letter reads. “We agree with the NCUA that it is prudent to offer credit unions relief with respect to certain regulatory requirements being triggered by unprecedented balance sheet growth, which is largely a result of individual member response to actions taken by monetary and fiscal authorities.”