Additional relief is needed for credit unions facing Prompt Corrective Action (PCA) challenges, CUNA, the American Association of Credit Union Leagues, and all Leagues wrote to NCUA leadership Thursday. The current interim final rule is scheduled to expire March 31.

“We believe such relief should remain in effect until the end of the pandemic as determined by the Centers for Disease Control (CDC) or other federal entity authorized to make such a determination,” the letter reads. “The NCUA adopted the current IFR, as well as its predecessor, to deal with an increase in share growth resulting from government stimulus payments. The reasons these IFRs were adopted in 2020 and earlier in 2021 are still as relevant today.”

The interim final rule scheduled to expire March 31:

• Permits the NCUA board to issue an order to temporarily waive the earnings retention requirement for any credit union classified as adequately capitalized; and
• Permits credit unions to submit simplified net worth restoration plans if the reduction in capital was caused by share growth resulting from a temporary condition due to the pandemic.

The organizations also call on NCUA to:

• Provide additional PCA relief by temporarily excluding certain assets from the net worth ratio.
• Engage Congress to pursue changes to the Federal Credit Union Act to provide NCUA with additional tools to aid credit unions that encounter PCA-related difficulties.
• Establish a new Regulatory Reform Task Force to review the agency’s regulations and recommend changes to eliminate outdated, unnecessary, or unduly burdensome requirements.