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New Reg Alert outlines Treasury's emergency capital program
In a new Regulatory Alert sent to members Friday, NAFCU detailed how the Treasury's interim final rule (IFR) to implement statutory eligibility requirements for the Emergency Capital Investment Program (ECIP) apply to credit unions. The program, established under the Consolidated Appropriations Act (CAA), will provide funds to eligible Community Development Financial Institutions (CDFIs) and minority depository institutions (MDIs) to support small businesses and consumers facing financial hardships amid the pandemic via loans, grants, and forbearance.
In the Regulatory Alert, which also poses questions for credit unions to consider, NAFCU highlights:
- the ECIP permits eligible CDFIs or MDIs to apply for Treasury funding in the form of a subordinated debt investment;
- the IFR addresses restrictions on executive compensation, share buybacks, and dividend payments for recipients of ECIP investments; and
- most requirements related to executive compensation applicable to federally-insured credit unions can be satisfied through compliance with existing NCUA regulations.
Financial institutions serving low- and moderate-income communities now have access to $9 billion in capital from the Treasury's Emergency Capital Investment Program (ECIP). Eligible credit unions can submit applications online through May 7.
For more on the rule, including a section-by-section analysis, access the Regulatory Alert here. Comments on the proposal are due to NAFCU March 29; comments are due to Treasury April 8.
In addition, NAFCU Regulatory Affairs Counsel Aminah Moore provided insights into the ECIP and a NCUA webinar on the program in recent posts on the NAFCU Compliance and CFO Networks.
NAFCU will continue to work with federal regulators and Congress to ensure credit unions have access to programs and tools needed to assist their members through the coronavirus pandemic and beyond.