The Credit Union National Association and state credit union leagues are calling on the National Credit Union Administration to establish a Regulatory Reform Task Force to weed out outdated, unnecessary, and burdensome regulations.
The NCUA established such a group in 2017 and the panel issued two reports containing recommendations for changes to the agency’s regulatory regime. The task force consisted of agency employees.
CUNA and the leagues said they strongly supported that effort.
In a letter to the agency board, CUNA and the leagues said this time the task force should include representatives from individual credit union and industry trade groups.
“Such a diverse makeup will ensure the review includes the perspectives of all impacted parties, rather than that solely of the federal regulator,” CUNA and the leagues said in the letter. “Considering the unprecedented operational, economic, and consumer changes resulting from the COVID-19 pandemic, we believe the agency should pursue this new Task Force and regulatory review in early 2022.”
The NCUA reviews all its existing regulations every three years, the agency noted on its website. The agency’s general counsel keeps a rolling review of the rules to be reviewed each year and the public is invited to comment on them.
In the same letter, CUNA and the state leagues asked the NCUA to extend the temporary Prompt Corrective Action flexibility it adopted at the start of the pandemic. They said that those rules should be extended until the end of the pandemic.
Specifically, CUNA and the leagues urged the agency to provide Prompt Corrective Action relief by temporarily excluding certain assets from the net worth ratio. As a result of an influx of consumer deposits, credit unions are investing funds in zero-risk and low-risk assets, such as Treasury securities. These deposits and the investments have caused a decrease in the net worth ratio of many credit unions.