WASHINGTON—CUNA has sent a new letter to NCUA Chairman Rodney Hood outlining potential actions the agency could take to alleviate the effects of the coronavirus pandemic on credit unions.
“As part of our efforts, we have engaged with credit unions of all sizes throughout the country to collect feedback on the top issues they are currently experiencing," the letter reads. "Based on this feedback, we have the following policy recommendations the NCUA should consider in its efforts to help credit unions. This feedback supplements CUNA’s previous communications with you, other members of the NCUA board, and NCUA staff."
The recommendations include:
- Allowing for greater flexibility in providing notice of annual meetings that are postponed or changed to a virtual annual meeting, including guidance that will allow credit unions to utilize electronic methods for notices even if a member has elected to receive paper notices
- Allowing interest to be capitalized on consumer mortgage loans, in connection with a loan modification, consistent with loans sold to Fannie Mae or Freddie Mac
- Quickly finalizing the proposed rule increasing the threshold level below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000
- Providing credit unions the ability to work with payday alternative loan borrowers to refinance those outstanding loans into other low-cost emergency credit products or potentially extend the term of the loan beyond the regulatory limit
- Adjusting examination guidelines to provide credit unions with greater flexibility, specifically to understand and consider credit unions’ good-faith efforts regarding Regulation B (Equal Credit Opportunity Act) notices for new credit products intended to assist members during the pandemic
- Expeditiously adopting any needed rule changes to ensure the Central Liquidity Facility’s (CLF) borrowing authority and membership parameters conforms to the CLF provisions passed in the CARES Act
- Remaining mindful of overly prescriptive solutions to capital and liquidity management problems that could ultimately cause greater regulatory burden for credit unions
- Letting National Credit Union Share Insurance Fund (NCUSIF) capital do its work throughout the crisis period. If the NCUSIF equity ratio drifts downward as expected, NCUA should avoid compounding any capital stresses credit unions may experience this year due to the crisis by deferring any potential 2020 NCUSIF premium assessment
- Encouraging the agency to further delay the risk-based capital rule (RBC) effective date to, at earliest, January 1, 2023. In addition, CUNA supports a threshold increase for RBC compliance from $500 million in assets to $10 billion in assets
- Sharing CUNA and credit union concerns with the account transfer limit under Regulation D
Sherman Addresses Reg D
Separately, Congressman Brad Sherman sent a letter to the Federal Reserve System seeking the temporary relief from Regulation D transfer limits. CUNA thanked Sherman for his effort.
“Ensuring that Americans have rapid, ready access to their finances is paramount to mitigating the widespread economic effects of the COVID-19 pandemic. By temporarily waiving or raising the Regulation D limit on savings transfers, the Federal Reserve Board will help credit unions and other financial institutions in their quest to meet consumers’ needs while aiding in social distancing and shelter-in-place orders across the country,” said CUNA President and CEO Jim Nussle. “We thank Rep. Sherman for his efforts to support consumers’ financial access and his support for the financial first responders serving families throughout this crisis.”