NCUA's Hood supports NAFCU-sought reforms in letter to Senate chairman
In a letter sent to Senate Banking Committee Chairman Mike Crapo, R-Idaho, this week, NCUA Chairman Rodney Hood spoke out in support of greater relief for the credit union industry amid the coronavirus pandemic, including many NAFCU-sought initiatives. The letter was sent in response to an inquiry from Chairman Crapo to financial regulators asking for updates on pandemic relief efforts.
“NAFCU appreciates NCUA Chairman Hood’s proposals to provide credit unions greater relief to better serve their members,” said NAFCU President and CEO Dan Berger. “Our advocacy team has been active in Washington to make sure credit unions’ voices are heard, and we will continue to support legislative solutions to aid the industry as it faces the challenges posed by coronavirus pandemic head on.”
Hood offered several recommendations that would improve liquidity, provide capital relief, enhance community lending opportunities, and increase access for remote financial services delivery for credit unions.
On liquidity, the NCUA suggested:
- make changes to the Central Liquidity Facility permanent; and,
- grant temporary authority for the NCUA Board to waive the limit for federally chartered credit unions lending to other credit unions.
On prompt corrective action framework, the NCUA suggested:
- temporary reduction in minimum capital standards for federally insured credit unions;
- temporary waiver of net-worth restoration plan requirement; and,
- temporary increase from $5 million to $100 million for the asset threshold below which the NCUA Board can delegate decisions related to critically undercapitalized credit unions.
On lending, the NCUA suggested:
- temporarily raise the Member Business Lending Cap;
- permanently increase the federal credit union loan maturity limit from 15 years to 30 year; and,
- permanently expand credit union reach for underserved areas.
Due to many credit union branch closings, Hood also requested that should multiple common bond credit unions want to offer services to select employee groups or associations that the credit union service be in reasonable proximity to a credit union service facility.
NAFCU recently urged the NCUA to provide credit unions with many of the above mentioned reforms to provide additional capital relief. Additionally, NAFCU also met with NCUA Board Members Todd Harper and J. Mark McWatters to thank them for their support in reforming the member business lending cap.
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