ALEXANDRIA, Va.—CUNA and NAFCU have each written to NCUA regarding the agency’s draft 2022-2026 strategic plan, which was approved by the NCUA board in November of last year.
NAFCU Vice President of Regulatory Affairs Ann called on NCUA to provide credit unions the necessary flexibility to adapt to new technologies and to take steps to reduce credit unions’ regulatory compliance burdens.
“NAFCU urges the NCUA to adjust its goals and objectives accordingly to ensure it aligns with the final budget, recognizes lessons learned from the COVID-19 pandemic, and maintains the efficient use of credit union dollars,” wrote Kossachev.
Noting the NCUA board recently set the Share Insurance Fund’s (SIF) normal operating level (NOL) at 1.33% in partial recognition of the credit union industry’s financial strength, Kossachev requested the board return the NOL to its historic level of 1.30% to “strike an appropriate balance” between protecting consumers against financial risks and allowing credit unions to access the funds they need to continue providing quality, affordable financial services to their members.
Regarding examinations, NAFCU said the new Modern Examination Risk Identification Tool (MERIT) is designed to help streamline examinations while reducing compliance burdens, and as such, the association also called on the agency to increase the exam flex cap to $3 billion to provide greater flexibility to credit unions and allow examiners to focus on more high-risk institutions.
Other Points
In addition:
- NAFCU called on the NCUA to help bridge the financial gap by encouraging Congress to amend the Federal Credit Union Act to allow all credit unions to add underserved areas to their fields of memberships, along with streamlining the chartering process to establish new credit unions.
- The association encouraged the agency to work with Congress and Treasury to improve the Community Development Financial Institution (CDFI) application process and the current application backlog.
- NAFCU suggested broadening financial accessibility through revisiting “the service facilities rule to include ATMs as well as mobile and online banking services in the definition of service facility for the addition of underserved areas.”
- NAFCU urged the NCUA to strengthen and diversify the agency’s workforce through improving technical skills and modernizing examinations.
CUNA Response
In its letter, CUNA stated that it supports the high-level goals of NCUA’s strategic plan, but also offered feedback and suggestions around a number of points.
The letter:
- Reiterates CUNA’s opposition to any changes to the Federal Credit Union Act related to the National Credit Union Share Insurance Fund. CUNA said NCUA Chairman Todd Harper has called for legislative changes the association believes “truly represent a solution in search of a problem.”
- Calls on NCUA to make progress toward its stated goal of providing effective and efficient supervision by reducing the frequency by which it examines smaller credit unions and extending the credit union asset threshold for the 18-month examination cycle to $3 billion (up from the current $1 billion).
- Raises “significant” concerns around any expansion in consumer protection examination activity, arguing there has been no supplementary evidence to suggest credit unions’ consumer compliance management is a systemic risk area.
- Urges NCUA to establish a new Regulatory Reform Task Force to review the agency’s regulations and recommend changes to eliminate outdated, unnecessary, or unduly burdensome requirements
- Encourages NCUA to continue efforts to promote diversity and inclusive and equitable financial services at credit unions.