WASHINGTON—With Treasury Secretary Janet Yellen appearing before Congress this week, NAFCU has sent a letter to members of the House Financial Services committee expressing concerns it has over issues it said will affect credit union.
NAFCU Vice President of Legislative Affairs Brad Thaler told the committee those concerns include:
CDFI Fund
“NAFCU continues to hear concerns from our members about the operations of the Community Development Financial Institutions Fund,” Thaler wrote. “…Throughout this entire process, the Fund has not been responsive to stakeholders and certified institutions. This has led to confusion with certified CDFIs as well as operational challenges due to the longer than anticipated pause on applications. Making matters worse, insured and regulated credit unions now make up the largest category of CDFIs at the Fund, yet depositories only receive a small amount of the total funds disbursed by the Fund.”
Climate Risk
On NCUA’s climate risk-related initititives, Thaler said NAFCU “believe[s] it is crucial for the NCUA to ensure that any regulations or guidance issued to credit unions regarding climate-related financial risk align with those of other federal banking regulators. The harmonization of regulations across the financial sector is essential to maintain a level playing field and promote fair competition. If the NCUA were to impose more restrictive guidance or regulations on credit unions compared to other banking institutions, it could create a significant disadvantage for credit unions in terms of their viability and competitiveness.”
Greenhouse Gas Reduction Fund
Finally, on the GHGR Fund, Thaler emphasized NAFCU’s concerns about the Environmental Protection Agency’s proposed design of the program “could limit financial institution participation.”
“Credit unions and CDFIs are well-positioned to use this program to help a number of American communities reduce their greenhouse gas emissions,” the letter states. “To effectively deploy funds from the program, the EPA should rely on already well-regulated and supervised not-for-profit depository institutions that have extensive experience in lending to local communities instead of untested, unregulated non-profit entities that are unfamiliar with consumer financial protection laws. We encourage Treasury to advocate for credit unions and CDFIs with the EPA as well and urge you to call on Secretary Yellen to do so.”
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