Congress should expand the ability of all credit unions to serve underserved areas, NCUA Chairman Rodney Hood wrote this week, as he sent Senate Banking Chairman Mike Crapo (R-Id.) a list of legislative changes he believes will help the agency respond to the coronavirus crisis.
“Extending this will provide greater access to financial products and services to those who may have been the most impacted by the pandemic,” Hood wrote, in response to a request by Crapo for financial regulators to provide him with proposals that would help financial institutions respond to the pandemic.
Hood added that Congress should designate Opportunity Zones as underserved areas and allow any credit union to expand services to businesses and individuals in those areas. Credit union trade groups have been pushing for legislation that would allow their members to expand services to underserved areas.
In the letter, Hood also asked Congress to raise the Member Business Lending cap to 20% during the recovery period following the pandemic.
Hood also provided details of other legislative previsions he said would help credit unions and their members weather the pandemic, including:
- Reducing the level at which credit unions are considered well-capitalized from a net-worth ratio of 7% to 6% and adequately capitalized from 6% to 5% during the pandemic. In addition, Hood said that Congress should give the NCUA the authority to waive, for up to 180 days, the requirement that less-capitalized credit unions develop a net-worth restoration plan.
- Increasing the federal credit union loan maturity limit from 15 years to 30 years.
- Making it easier for multiple common bond credit unions to offer services to select employee groups or associations.
- Providing NCUA with the power to supervise for third-party cybersecurity risks.
- Increasing funding for the agency’s Community Development Revolving Loan Fund. He noted that credit unions are not eligible to apply for loans for themselves under the Paycheck Protection Program, adding that an increase in funding would help institutions affected by the coronavirus crisis.