NWCUA to Convene Credit Unions, State, and Federal Regulators

5/26/2020

COVID-19 changed the world, and credit unions quickly changed the way they operate to serve their members and protect the health and safety of members and employees. With that came the need for agility on the regulatory front.

Since the onset of the pandemic, the Northwest Credit Union Association and its member credit unions have regularly engaged with state regulators in Idaho, Oregon, and Washington, and with the National Credit Union Administration.

On Friday, May 29, that engagement will continue when the Northwest Credit Union Association hosts a webinar featuring leaders from state and federal regulatory agencies. Regulators will be invited to share revised exam focuses, how exams are changing, and what flexibilities are in place to allow credit unions to be responsive to the COVID-19 pandemic.  

This panel discussion is an opportunity for credit unions to share thoughts on the current operating environment, such as how remote exams have been working and whether they should continue. Credit unions can also discuss the tools they need to meet the growing needs of their members during these challenging times, according to John Trull, NWCUA Vice President of Regulatory Affairs. 

The 90-minute panel begins at 10 a.m. PDT (11 a.m. MDT). Register here.

“The NWCUA Regulatory Advocacy team has been working with our regulatory agencies, at every level, to address the challenges and concerns that you are facing during this public health crisis.”
– John Trull, NWCUA Vice President, Regulatory Affairs

Credit unions’ federal regulator, the NCUA, held its May Board of Directors meeting May 21. The agency’s board unanimously supported two changes to its internal Prompt Corrective Action (PCA) requirements.

The first change allows for a streamlined PCA process if a credit union is experiencing net worth reductions due primarily to share growth. The second action streamlined the regulatory exception process for credit unions under PCA that are seeking approval to redeploy income rather than moving income to retained earnings, as is required under current PCA provisions.

Northwest credit unions have discussed this issue with Chairman Rodney Hood, specifically during last month’s COVID-19 Forum. During the call, NCUA Regional Director Cherie Freed provided an update regarding NCUA’s review of this matter and that they were working to take action that would assist credit unions that were impacted from significant inflow of stimulus deposits. You can review the proposed rule changes here.

Read our full analysis of the NCUA Board meeting here.

“The action taken on the NCUA’s PCA rule continues to demonstrate how important the credit union advocacy voice is and will continue to be,” Trull said. “The NCUA has heard from our Northwest credit unions that regulators need to be flexible and understanding, particularly around net worth, as rapid deposit growth is putting downward pressure on net worth ratios. The agency responded to our direct requests with this important action.”

NWCUA continues advocacy to ensure credit unions do not face administrative moratoriums or edicts that would directly harm their service to members. Options for expedited secondary capital, congressional adjustments to capital ratios, and a partial distribution of member paid in capital from the corporate estates, where applicable, are continuing priorities.   

More details on NCUA’s COVID-19 actions can be found here.

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