May 12, 2020

NCUA's Hood to discuss COVID-19 efforts with senators today

Hood headshot
NCUA Chairman Rodney Hood

NCUA Chairman Rodney Hood and representatives from other banking regulators are set to testify today before the Senate Banking Committee to discuss regulators' efforts to provide financial institutions with relief and resources amid the coronavirus pandemic. Ahead of the hearing, NAFCU sent a letter to the committee outlining ways the NCUA and lawmakers can provide even more relief to credit unions.

The hearing, set to begin at 10 a.m. Eastern, will be available via livestream. Federal Reserve Vice Chairman for Supervision Randal Quarles, Office of the Comptroller of the Currency Comptroller Joseph Otting, and FDIC Chairman Jelena McWilliams will testify alongside Hood. The regulators are also set to participate in a virtual roundtable with the House Financial Services Committee tomorrow.

Throughout the pandemic, NAFCU has worked closely with the NCUA, Congress, administration and other agencies to ensure credit unions' concerns are addressed and the industry is fully equipped to meet members' needs. The NCUA has taken several steps to address credit unions' concerns; access all its coronavirus-related guidance here.

Hood recently sent a letter to Senate Banking Committee Chairman Mike Crapo, R-Idaho, outlining greater relief options for credit unions amid the coronavirus pandemic. In the letter sent Monday, NAFCU Vice President of Legislative Affairs Brad Thaler reiterated NAFCU's support for several of Hood's recommendations, including:

  • providing relief from the member business lending (MBL) cap;
  • increasing the 15-year general maturity limit on loans under the Federal Credit Union Act;
  • allowing all credit unions to add underserved areas to their fields of membership;
  • making changes made by the CARES Act to the NCUA's Central Liquidity Facility, which allow credit unions easier access to the facility, permanent;
  • providing temporary relief on par with community banks as it relates to credit unions' capital standards;
  • granting the NCUA authority to waive requirements of a net-worth restoration plan for credit unions that are less than adequately capitalized for up to 180 days;
  • granting the NCUA greater flexibility to make decisions related to credit unions that are experiencing a fluctuation of capital levels as a result of the pandemic; and
  • making statutory changes to the "reasonable proximity" requirement to permit flexibility for members to join a credit union.

Thaler also offered additional legislative recommendations, such as providing credit unions with relief from the current expected credit loss (CECL) standard, more funding for the Community Development Financial Institutions (CDFI) Fund and Community Development Revolving Loan Fund (CDRLF), and modernizing outdated governance provisions in the Federal Credit Union Act. He also cautioned against granting the NCUA third-party vendor authority as the agency already has tools in place to get access to information about vendors.

In addition, Thaler drew attention to other areas NAFCU has sought relief from the NCUA, including ongoing exam modernization efforts and examiner flexibility related to the paycheck protection program to ensure credit unions are not penalized for minor errors due to lack of guidance or uncertainty.

NAFCU will monitor the hearing and provide an update of the discussion to credit unions in tomorrow's NAFCU Today. The association will continue working closely with the NCUA and Congress to address credit unions' concerns amid the coronavirus pandemic. Access NAFCU's coronavirus-related resources here, including a chart summarizing regulators' actions, FAQs on the PPP, and a summary of CARES Act provisions.