NCUA: Agency, credit unions must evolve climate risk understanding

July 18, 2023

NCUA Deputy Executive Director Rendell Jones testified before the House Financial Services Subcommittee on Financial Institutions and Monetary Policy Tuesday in a hearing on financial regulators and climate risk. Jones discussed NCUA’s recent climate-related financial risk request for information, as well as its legislative priorities.  

CUNA noted in its response it would strongly oppose any rulemaking/regulatory activity in the area of climate-related financial risk beyond the RFI.

“As the NCUA’s 2022–2026 Strategic Plan notes, credit unions should consider how climate-related financial risks may affect their membership and institutional financial performance. The agency’s current work in this area aims to enhance its understanding of these risks,” Jones said. “The agency believes credit unions are best positioned to assess various risks and opportunities within their specific fields of membership. Climate change presents several conceptual and practical challenges for credit unions and the NCUA.

“Just as credit unions must continue to adapt to account for climate-related financial risks, among other risks, NCUA must evolve its understanding of the impact on credit unions, credit union members, the credit union system, and the National Credit Union Share Insurance Fund,” he added.  “Any new requirements for credit unions associated with climate-related financial risk would require changes to examination and supervision procedures and approval by the NCUA Board before implementation.”