BISMARCK, N.D.–NCUA’s Strategic Draft plan is a “direct attack” upon credit unions in the Dakotasthat support agriculture and livestock producers and the energy sector businesses, according to a comment letter from the Dakotas Credit Union Association.
In a statement on the association’s website, DCUA President and CEO Jeff Olson wrote, “For the last several months, we have been concerned by NCUA Chair (Todd) Harper’s comments made to our credit unions as recently as September, as well as the NCUA’s draft Strategic Plan 2022-2026 regarding FOM and the type of loans impacted by climate change. Over the last ten days we have engaged all four of our Senate offices (Senator Cramer, Senator Rounds, Senator Hoven, and Senator Thune) on the issue.
Olson said the NCUA chairman told the group, “We are actively monitoring certain segments of the system, including credit unions closely connected to the oil and gas industry and the agricultural sectors, among other.”
Threat from Climate Change Cited
Olson also cited page 12 of the agency’s strategic plan, which states, “Changing weather patterns will disproportionately affect farming communities. Over time, climate change will likely affect the value of collateral, including homes and vehicles. To remain resilient credit unions may need to consider adjustments to their fields of membership as well as the types of loan products they offer. Efforts to combat climate change will likely give rise to new regulations, potentially increasing costs for credit unions as they adapt and respond.”
“As you know, several credit unions here in the Dakotas are engaged in financing farm and ranch producers, many in our rural communities,” Olson wrote. “Most of these credit unions were initially chartered to serve their farming and ranch members. We also have credit unions that support peripheral businesses in the energy sector here (oil, gas, and coal). Some credit unions have already experienced securitization in recent exams from the NCUA and a few have been told to eliminate these loans from their portfolios. Some have been notified by the NCUA they will now be on a 12-month exam cycle because of their concentrations in ag and ranch lending.
“In our Dakota region, agriculture extends well beyond crops and livestock. It includes agritourism, agribusiness and food processing, equipment manufacturing and dealerships, innovative technology, local food and farmers markets, and agricultural education,” Olson stated.
The ‘Answer’
Rather than being a threat, Olson said farmers in the Dakotas are the “answer to climate change and plant-based agriculture enhances climate resiliency,” which he said the federal regulatory “does not fully understand or refuses to acknowledge.”
“The high value of sustainable agriculture to the climate must be duly recognized. Current regenerative agricultural practices positively contribute to environmentally friendly undertakings such as carbon sequestration,” he added.
The Dakota CU Association comment letter can be found here