WASHINGTON—Senate Banking Committee Chairman Mike Crapo (R-ID) has sent a letter to NCUA Chairman Rodney Hood and other financial institution regulators calling on them ensure credit unions and banks have the flexibility to meet members' needs amid the coronavirus pandemic.
In the letter Crapo highlighted that financial institutions stepped up to support struggling small businesses through the Paycheck Protection Program (PPP), which caused the institutions to "inadvertently experience significant balance sheet growth." While this growth is expected to decline as PPP forgiveness begins and the dollars flow out, the result has been increased deposits that have put a strain on some institutions’ capital positions.
"Crossing these thresholds would entail new, expensive and burdensome regulatory requirements to which they would not have otherwise been subject," Crapo wrote. "Banks and credit unions must not be deterred from continuing to play a key role in the recovery and must maintain ample flexibility to serve customers and work with those affected by the pandemic.
"As each of your agencies continue taking actions to provide liquidity to the marketplace and support lending to households and businesses, I urge you to use your discretion to minimize the regulatory impact on banks and credit unions resulting from their participation in the PPP," he concluded.