ALEXANDRIA, Va.–NCUA has provided new guidance around its priorities for examinations of credit unions during the coronavirus pandemic. The agency provided some insights into those priorities during a webinar on Tuesday and in a Letter to Credit Unions.
Separately, the agency has announced new loans and grants available to low-income credit unions.
As CUToday.info reported earlier, NCUA had already announced its examination staff would be working off-site and that all exams would occur virtually through at least May 1.
"Our top priority is the safety of agency staff, credit union employees, and members," NCUA Chairman Rodney Hood said in the letter. "During this time, the NCUA will limit the burden imposed on credit unions so that they can focus on providing uninterrupted service to their members."
The Priorities
According to NCUA, its priorities for exams in the current environment include:
- Giving priority to any credit union experiencing significant financial or operational problems.
- Having examiners contact each CU periodically to review operational and financial status and whether assistance is needed.
- Not requiring a credit union to provide information to examiners who are conducting an offsite exam (unless approved by the agency’s executive director) while the pandemic is ongoing.
Grants, Loans Available
Separately, NCUA announced federally insured credit unions with a low-income designation can now request grants and loans from NCUA to assist members, businesses, and communities experiencing economic hardships due to the COVID-19 pandemic.
The agency said $4-million in loans and $800,000 in grants are now available.
NCUA said its Office of Credit Union Resources and Expansion will award grants and loans to low-income credit unions to:
- Provide assistance to schools with children in need, including providing breakfast and lunch
- Provide assistance to elderly members needing food and medication delivery services
- Offer rental, mortgage, and utility payment assistance to members such as entrepreneurs, small business owners, and hospitality and service industry employees
- Offer loan payment relief to affected members
- Develop a new product or service for affected members, such as offering preloaded cards
- Cover costs associated with moving credit union operations to remote locations: laptops, software, and short-term rentals
Serving the Vulnerable
“The COVID-19 pandemic will affect federally insured credit unions, members, and communities in a number of different ways,” NCUA Chairman Rodney E. Hood said in a statement. “Low-income credit unions serve many communities that are vulnerable to economic and financial disruptions resulting from the virus. This initiative can help eligible low-income credit unions provide needed support to their members and communities during this challenging time. I encourage all eligible credit unions to consider and apply for these special grants and loans.”
Eligible credit unions may apply for the COVID-19 Emergency Response grants or loans now through May 22 using the NCUA’s CyberGrants portal.
According to NCUA, the loans have a maximum award of $250,000 and will mature in three years. There will be no interest rate applied to loans awarded under the initiative throughout the full term of the loan, and all loans must be repaid to the NCUA regardless of how they are accounted for by the credit union. The entire principal is due at maturity. There is no penalty for principal prepayment. Principal prepayments may be made as often as monthly, NCUA said.
Funds Awarded on Rolling Basis
Grants, with a maximum award of $10,000, will be awarded on a rolling basis throughout the open application period. Minority depository institutions and credit unions with less than $100 million in assets will receive priority, with NCUA saying it will make awards on a first-come, first-serve basis until the allocated funds are fully exhausted.
An additional $700,000 in grant funds for digital services and cybersecurity, training, MDI mentoring, and underserved outreach initiatives will be available. Applications for those funds will be accepted between May 1 and June 30. Additional information on these initiatives will be available as the opening date of the application round approaches.
NCUA said funding for the initiative is being provided by the Community Development Revolving Loan Fund.