ARLINGTON, Va.–Just how much attention should credit unions and their regulators be paying attention to climate change?
It’s an issue that is increasingly the subject of attention, including during a recent Senate Banking Committee hearing that posed questions for NCUA and other regulators on climate change.
Beyond the hearing, NCUA Chairman Todd Harper has also raised the issue of climate change in remarks he has made to credit unions, saying there are risks to mortgages, for instance, in areas where flooding may be at increased risk.
One CU economist agrees the risk is worth watching, but for now he is downplaying the amount of attention the risk deserves from the CU community.
“I think it’s an issue credit unions need to be aware of,” said NAFCU’s chief economist, Curt Long. “And I think they are. From a systemic perspective I’m not sure credit unions make much of a dent one way or another. It’s not like credit unions are making a lot of investments in fossil fuels. I understand why regulators are looking at it; it’s important. I just don’t think credit unions have the exposure to the kinds of risk that other financial institutions do.”
As for the issue of potential losses on mortgages for homes in zones flooded as a result of rising ocean levels or increased flooding, Long said he understands why credit unions and the agency would want to monitor the issue, but he believe the vast majority of credit unions are diverse enough in their lending portfolios that the exposure isn’t there.