In a letter to the Senate Banking Committee and the House Financial Services Committee, Curt Long of the National Association of Federally-Insured Credit Unions argues that the National Credit Union Administration’s equity ratio will bounce back. Therefore NAFCU is opposed to a credit union premium assessment.
The Credit Union National Association and the National Association of Federally-Insured Credit Unions are warning Congress that small businesses are going to continue to struggle from the economic impact of COVID-19, even after the most recent cycle of the Paycheck Protection Program is completed.
The Normal Operating Level of the Share Insurance Fund, set by the National Credit Union Administration before the pandemic, is 1.38%. The ratio currently sits at 1.26% and at 1.20% the NCUA will be required to develop a restoration plan that will involve additional premiums on credit unions. The Credit Union National Administration, the National Association of Federally-Insured Credit Unions and the National Association of State Credit Union Supervisors all oppose a premium now, arguing that the ratio is higher because of economic stimulus payments to members and that charging credit unions additional premiums during an economic downturn is not a good plan.
The National Association of Federally-Insured Credit Union’s Curt Long is predicting that the National Credit Union Association’s Share Insurance Fund will be strong enough that a new premium will not be needed. The official word on this will come at the NCUA’s board meeting on February 18.
In December, the National Credit Union Administration approved a proposed rule that would expand credit union fields of membership. Bankers claim the rule would permit an illegal expansion of those fields.
The Credit Union National Association and the National Association of Federally-Insured Credit Unions have been letting the Biden administration and legislators know the actions they believe will help credit unions help their members during the pandemic. These lists are extensive, but may be tough to achieve with an administration focused on tightening up financial regulations.
Sen. Jack Reed (D-R.I.), Senate Banking Chairman Sherrod Brown (D-Ohio) and Senate Appropriations Chairman Patrick Leahy (D-Vt.) have introduced legislation to create a $75 billion Homeowner Assistance Fund, designed to help homeowners hit by the coronavirus crisis. The fund is targeted to prevent avoidable foreclosures, evictions and utility shutoffs. Credit union trade groups are supportive.
Credit union trade groups like a National Credit Union Administration proposed rule that would allow federal credit unions to purchase mortgage servicing rights from other federally-insured credit unions. NCUA Chairman Todd Harper is worried about the risks associated with mortgage servicing.
The re-invigorated Paycheck Protection Program remains beset with problems that are keeping small businesses from obtaining much-needed assistance, trade groups representing credit unions and accountants said this week.
The Credit Union National Association again is urging Congress to include temporary coronavirus liability protection in any new economic stimulus legislation it considers.