March 13, 2020

Berger calls for immediate assistance for CUs from NCUA, CFPB

CapitolAs credit unions have reached out for guidance on various regulatory and compliance concerns during the coronavirus outbreak, NAFCU President and CEO Dan Berger sent letters to the NCUA and CFPB calling for broad flexibility with compliance for at least 60 days.

Credit unions have proactively worked to keep their staff, members and families safe while ensuring there is no disruption to vital financial services, Berger wrote, and NCUA and CFPB should support these efforts with regulatory guidance.

Specifically, in letters to the NCUA, Berger said as long as credit unions' actions are in the spirit of the Federal Credit Union Act, “NAFCU asks that the NCUA allow credit unions flexibility in determining how best to comply with member meeting requirements, whether that means permitting virtual meetings or flexibility with rescheduling annual meetings."

“Various state and local governments, including the state of Washington, have recommended halting all large group gatherings,” Berger noted. “Credit unions face the dilemma of non-compliance if they abide by government recommendations and hold virtual-only meetings. However, if a credit union holds an in-person meeting the health and safety of attendees is at risk."

Berger sent the letters to NCUA Chairman Rodney Hood and Board Members Todd Harper and Mark McWatters. In them, he stressed the importance of the NCUA addressing compliance with regulations that credit unions may find difficult or impossible to comply with due to proactive measures they have taken, such as abiding by federal government health and safety recommendations.

In the letter to CFPB Director Kathy Kraninger, Berger insisted that the bureau should consider both immediate and longer-term actions to support business continuity, such as assuring credit unions and other financial institutions that they will not be penalized for the steps they take to assist consumers on an expedited basis or through social distancing procedures.

Berger also suggested that, to enhance the speed at which loan modifications and other applications are processed (such as requests for emergency credit), the bureau should seek to alleviate disclosure-related compliance burdens. The bureau may also seek to accommodate efforts to “expedite the processing of consumer applications and implement social distancing policies, even if the cost of such speed and adaption is a trivial reduction in accuracy.”

“To date, the Bureau has taken the position that even small errors on disclosures are an examination concern,” wrote Berger. “Regardless of the merits of this policy under normal conditions, the present scenario introduced by COVID-19 fundamentally changes the value of such an unforgiving stance.”

NAFCU has developed a resource page online in response to the coronavirus to direct credit unions to CDC and World Health Organization resources and answer FAQs. Subscribe to NAFCU Today to stay informed.