WASHINGTON–The potential risk to credit unions from a flood of checks being sent to most Americans is among the issues being raised by CUNA with members of Congress. Separately, CU regulators from five different continents participated in a discussion about responses to the coronavirus threat.
CUNA has sent two letters to Capitol Hill, one to House Financial Services Committee (HFSC) Chairwoman Waters and Senate Banking Committee (SBC) Chairman Crapo and Ranking Member Sherrod Brown (D-OH) regarding the credit union’s industry response to coronavirus (COVID-19).
CUNA noted that Brown, ranking member of the Senate Banking Committee, and Rep. Maxine Waters (D-CA) had earlier this week echoed the trade association’s call for a moratorium on federal regulator rulemakings unless specifically designed to provide COVID-19 relief.
Three Key Concerns
CUNA said the letters outline key credit union concerns and adaptive measures to keep members, volunteers and employees safe while continuing to provide vital financial services. Immediate concerns include:
- Recent media reports urge consumers to hold a month’s worth of cash. However, credit unions and other financial institutions remain the safest place for people to keep their money.
- Plans to distribute checks to Americans raise industry concerns as recipients will likely flood credit unions and banks to deposit these checks, putting themselves and financial institutions employees at undue risk (see related story in CUToday.info).
- An uptick in cyberattacks and elder abuse which demonstrate the need for Congress to raise awareness of phishing scam and work to prevent them.
CUNA noted it is currently surveying members to better understand how they are planning during the outbreak. “Adaptive measures are being undertaken as many credit unions have already implemented emergency programs such as payday advance loans, 0% personal loans, and deferred payment options,” CUNA said.
The trade group said it fully supports the proposal to prohibit financial regulators from adopting rules not directly related to responding to the coronavirus for the length of the crisis and outlined several steps that Congress, regulators and the administration should take to further facilitate credit union service to their members.
In a request for additional action, CUNA is also recommending Congress to consider permitting corporate credit unions to serve as agents for credit union access to NCUA’s Central Liquidity Facility (CLF).
“As the crisis persists, credit unions will need to be able to efficiently access additional liquidity sources,” CUNA said.
International Regulators Hold Discussion
Separately, thirty credit union regulators from five continents joined together to discuss how credit union supervisors are responding to the threats from the coronavirus COVID-19. The discussion was organized by the International Credit Union Regulators’ Network (ICURN).
“While the countries represented are at different stages of the pandemic affecting their populations, most countries are beginning to see the economic impacts of lower tourism and trade,” ICURN said in a statement. “Supervisors indicated they are preparing for the impact on financial institutions. Participants heard about measures implemented by regulators in Ireland, Canada and U.S. (NCUA, NASCUS and state supervisors).”
ICURN said it has also been in communication with the World Bank on relief activities and appropriate supervisory response.
Other Issues Discussed
ICURN noted the various national regulators are looking at extending deadlines for credit unions to hold annual general meetings and are considering allowing virtual board meetings and virtual services to members. Supervisors further discussed the importance of back-up liquidity arrangements at this time, strong capital buffers to absorb anticipated losses, and how to use limits and methods of regulatory forbearance where appropriate, ICURN said.
“While credit unions and supervisors in many countries have experience dealing with natural disasters, those crises often end quickly even if there are long-term effects. We’re in unchartered waters this time,” indicated Dave Grace, executive director of ICURN.
ICURN represents credit union supervisors and has members from 40 countries and jurisdictions.