CUNA and Leagues wrote to NCUA Friday encouraging the agency to pursue additional tools to aid credit unions facing Prompt Corrective Action (PCA) and other capital challenges. CUNA and the Leagues thanked NCUA for the Interim Final Rule that provides some relief, but highlights that Congressional action is needed for additional flexibility.

“This crisis has exposed what has been has been clear for a long time: NCUA lacks the statutory flexibility it needs to help credit unions navigate certain capital situations induced by natural disasters, public health crises, other emergencies, and the governmental responses thereto,” the letter reads, adding that NCUA should “actively engage” Congress to pursue changes to the Federal Credit Union Act.

The letter notes that it’s the “rigid requirements and prohibitions” regarding PCA in Section 1790d of the Federal Credit Union Act that “severely hamper the agency’s ability to assist credit unions.”

“That is why, last July, as Congress considered additional pandemic recovery legislation, we encouraged the Senate Banking Committee to include language to provide temporary flexibility to the NCUA to offer forbearance from PCA for credit unions impacted by the pandemic that were otherwise healthy prior to the onset of the crisis,” the letter reads. “While such language ultimately was not adopted, we believe it is critical that Congress provide the agency additional authority to adjust capital requirements or forbear prompt corrective action for credit unions impacted by the current crisis and future crises.”

The letter also lists how the pandemic, and pandemic-related economic assistance sent by the governments, have “presented downward pressure on otherwise healthy capital levels.”