CUNA wrote in support of NCUA’s Interim Final Rule on Prompt Corrective Action (PCA) relief Friday, and reiterated the call for additional PCA relief. NCUA issued the Interim Final Rule in April and was briefed on it at its April board meeting.

The rule temporarily enables the NCUA Board to issue an order to waive the earnings-retention requirement for any federally insured credit union that is classified as adequately capitalized; and second modifies regulations relating to specific documentation required for net worth restoration plans.

“While we appreciate and support the changes included in the IFR, we reiterate the call in our comment letter regarding the 2020 IFR that the NCUA refrain from prematurely setting a specific end date for these temporary relief measures,” the letter reads. “We recommend instead that the NCUA extend these temporary PCA measures until the later of: (1) the end of the COVID-19 pandemic as determined by the U.S. Centers for Disease Control and Prevention or other federal entity authorized to make such a determination; or (2) March 31, 2022 as provided in the IFR.

“This would help ensure these important and prudent PCA relief measures are available throughout the pandemic and the resulting economic turbulence and volatility, and do not expire at an arbitrary date that may require an additional IFR to extend such relief,” it adds.

The letter also reiterates the CUNA-League request that NCUA provide additional PCA flexibility by temporarily excluding certain assets from the net worth ratio.

“Credit unions are increasingly investing funds—which have significantly increased due to an influx of consumer deposits—in zero- and low-risk assets, such as shorter-term Treasury securities. These deposits and resulting investments, however, have caused a decrease in the net worth ratio for many credit unions,” the letter reads. “Therefore, we ask the NCUA to follow the lead of other federal banking regulators and exclude such investments, as well as 10% of deposits held at the Federal Reserve, from the net worth ratio calculation.”

CUNA also supports statutory changes to the Federal Credit Union Act to provide NCUA the tools it needs to aid credit unions regarding PCA and other capital issues.

This includes encouraging NCUA to work with Congress to support legislative language that would provide NCUA temporary flexibility to offer forbearance from PCA for credit unions impacted by the pandemic that were otherwise healthy at the onset of the crisis.

CUNA and Leagues wrote to NCUA in May calling for NCUA to temporarily exclude certain assets from the net worth ratio.