Policy changes from NCUA, Congress would help CU member service

May 11, 2020

Since the onset of the crisis, CUNA leaders have spoken with Hood several times, and CUNA and Leagues have also provided the agency with input on additional policies to help increase member service, several of which NCUA has acted on.

NCUA has allowed military personnel to count toward the low-income credit union designation, issued guidance on remote and virtual board meetings, implemented a rule to relax appraisal requirements, acted quickly to expand the Central Liquidity Facility and other actions since the onset of the pandemic.

“Notwithstanding the breadth and depth of the action NCUA has taken so far to help credit unions weather this crisis, more needs to be done,” CUNA’s letter reads. “We take this opportunity to highlight several areas where NCUA and Congress should take action to ensure that credit unions remain in a position to serve their members during this crisis and into recovery.”

Recommendation actions from the NCUA include:

  • Review its existing PCA regulations and offer forbearance to credit unions that may temporarily fall between the 6% and 7% net worth leverage ratio;
  • Further delay implementation of the risk-based capital rule to, at earliest, Jan. 1, 2023;
  • Understand and consider credit union’s good-faith efforts regarding Regulation B (Equal Credit Opportunity Act) notices for new credit products intended to assist members during the pandemic; and
  • Issue an interim final rule on Payday Alternative Loans (PALs) to ensure credit unions have the flexibility to meet members’ needs during the pandemic.

CUNA also provided a list of recommendations for Congressional policies, including:

  • Expand the borrowing ability of the Central Liquidity Facility to 25 times the paid in capital, extend the expanded borrowing authority until the end of 2021 and make permanent the ability of corporate credit unions to act as agents for credit unions;
  • 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;
  • Exempt credit union business loans from the member business lending cap until one year after the end of the COVID-19 emergency declaration. A House bill has introduced to accomplish this, and a Senate bill has been announced.