ARLINGTON, Va.–As the future Biden Administration increasingly takes shape, credit unions are beginning to get a better idea of what to expect during the next four years, although a number of questions remain.
“I certainly think we’re getting a better picture as individuals are named to key positions,” said NAFCU EVP and General Counsel Carrie Hunt. “(Joe Biden) has been leaning toward very seasoned individuals, in stark contrast to what we saw under the Trump administration. But it’s still too early to tell how policy will play out in the banking space. In general, it’s going to take a little while.”
Hunt added the transition to the incoming Biden administration is in keeping with how any new president takes office. She said the Trump administration transition in 2016 was an outlier.
But the transition to the Biden administration comes with a caveat, noted Hunt: the COVID-19 pandemic, which will dominate the new president’s early agenda.
“We are hopeful these economic conditions are temporary,” said Hunt, reminding that the Obama administration’s early agenda was dominated by the housing crisis.
Other Issues Addressed
Other points also addressed by Hunt:
The Potential for an NCUSIF Premium
“Our position relative to an NCUSIF premium has not changed,” said Hunt,. “We believe NCUA does not need to impose a premium just due to an increase in share deposits.”
Hunt said NAFCU continues to argue expanded investments of funds would alleviate the need for an NCUSIF premium, and that even if the equity ratio of the fund falls below the 1.2% floor at which a premium is required to be charged any restoration plan could be spread out over eight years.
The NCUA Budget
NCUA has recently announced its 2021 and 2022 budgets, which are slightly smaller than the 2020 budget due to significant savings related to examiner travel due to the coronavirus pandemic.
Hunt said NAFCU continues to urge NCUA to be “transparent” with its budget and the trade group is planning to provide feedback when the agency holds its budget briefing this week.
“We urge NCUA to use its dollars very carefully,” said Hunt, adding NAFCU will be paying particular attention to how NCUA budgets for contracted services and full-time employees.
CU Concerns Around Exams
As CUToday.info is reporting separately, a survey conducted by NAFCU found CEOs have concerns around NCUA’s new off-site exams. While both CU trade groups have been calling for an increase in such off-site exams conducted virtually, Hunt noted the NAFCU survey found credit unions expressing concerns around the “safeguarding of member data” and also ensuring the exams are conducted on an annual, if not 18-month, exam cycle.
“We have not seen that come to fruition,” said Hunt. “We are concerned NCUA will be examining credit unions even more often and constantly coming to credit unions seeking more information.”