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NAFCU flags CU issues ahead of HFSC hearing with Treasury’s Yellen
NAFCU sent a letter to members of the House Financial Services committee ahead of their scheduled hearing today with Treasury Secretary Janet Yellen. NAFCU Vice President of Legislative Affairs Brad Thaler offered the credit union perspective on a number of key issues, including the Community Development Financial Institutions Fund (CDFI Fund), NCUA’s climate risk data, and the Greenhouse Gas Reduction Fund (GHGR Fund).
“NAFCU continues to hear concerns from our members about the operations of the Community Development Financial Institutions Fund (CDFI Fund),” Thaler wrote. “…Throughout this entire process, the Fund has not been responsive to stakeholders and certified institutions. This has led to confusion with certified CDFI’s as well as operational challenges due to the longer than anticipated pause on applications. Making matters worse, insured and regulated credit unions now make up the largest category of CDFIs at the Fund, yet depositories only receive a small amount of the total funds disbursed by the Fund.”
On NCUA’s climate risk data, Thaler said NAFCU “believe[s] it is crucial for the NCUA to ensure that any regulations or guidance issued to credit unions regarding climate-related financial risk align with those of other federal banking regulators. The harmonization of regulations across the financial sector is essential to maintain a level playing field and promote fair competition. If the NCUA were to impose more restrictive guidance or regulations on credit unions compared to other banking institutions, it could create a significant disadvantage for credit unions in terms of their viability and competitiveness.”
Finally, on the GHGR Fund, Thaler emphasized NAFCU’s concerns about the Environmental Protection Agency’s proposed design of the program “could limit financial institution participation. Credit unions and CDFIs are well-positioned to use this program to help a number of American communities reduce their greenhouse gas emissions. To effectively deploy funds from the program, the EPA should rely on already well-regulated and supervised not-for-profit depository institutions that have extensive experience in lending to local communities instead of untested, unregulated non-profit entities that are unfamiliar with consumer financial protection laws. We encourage Treasury to advocate for credit unions and CDFIs with the EPA as well and urge you to call on Secretary Yellen to do so.”
NAFCU met with Treasury Department officials last month to speak about these issues and more.