The U.S. Supreme Court has given the National Credit Union Administration until May 26 to respond to a petition filed by the American Bankers Association challenging the agency’s Field of Membership rules. The ABA had challenged the rule amended in 2016.
The $3 trillion pandemic relief bill unveiled by House Democrats on Tuesday will help the nation recover from the coronavirus crisis, but it fails to give credit unions important tools they need to help in the effort, trade group lobbyists said Wednesday.
House Recovery Bill Ignores NCUA Requests for Member Business Lending Boost, Capital Requirements Decrease
The coronavirus relief bill unveiled by House Democrats Tuesday would not increase the credit union Member Business Loan cap or decrease capital standards—two major priorities of the NCUA and credit union trade groups.
The $3 trillion, 1,800-page bill includes about $1 trillion in aid to states and local government, as well as extended unemployment benefits and additional stimulus payments to taxpayers. It also would provide a safe harbor for financial institutions providing services to marijuana-related business.
Amid some opposition from a key Democrat, NCUA Chairman Rodney Hood told the Senate Banking Committee Tuesday that Congress should decrease capital standards for credit unions, as they respond to economic problems caused by the coronavirus crisis.
Hood said that he would like Congress to authorize a temporary reduction in minimum capital requirements—reducing the level at which credit unions are considered well capitalized from a net-worth ratio of 7% to 6%. He said that the level for “adequately capitalized” credit unions should be cut from 6% to 5%.
All 11 corporate credit unions have joined the NCUA Central Liquidity Facility, a move that will allow thousands of credit unions to apply for loans through the CLF, the NCUA announced Monday.
It will allow CLF coverage to be extended to more than 3,700 credit unions and increase the facility’s borrowing capacity by more than $13 billion, according to agency officials. All credit unions with assets of less than $250 million that are members of a corporate credit union are now eligible to apply for a loan from the CLF.
Credit union trade groups said Monday that the long-awaited CFPB final rule governing remittances does not go far enough in exempting financial institutions that make a relatively small number of transactions each year.
Democrats are renewing their call for more rigid Paycheck Protection Program set-asides for credit union and community banks, following reports from a government watchdog contending that program funds may not be reaching the neediest businesses.
“Not only did [the Small Business Administration] fail to issue guidance to prioritize the paycheck loan applications of underserved and rural small businesses, the agency implemented a ‘first-come, first-served’ policy that made it harder for vulnerable small businesses to access PPP,” Senate Small Business Committee ranking Democrat Ben Cardin (D-Md.) said, following the release of a report by the Small Business Administration’s Inspector General.
The Small Business Administration has failed to issue guidance to lenders to help ensure that pandemic Paycheck Protection Program Loans reach the businesses that most need them, as required by federal law, the SBA’s Inspector General said in a report issued late Friday.
In addition, since the agency has failed to require the collection of demographic information about borrowers, officials cannot determine if the loans are reaching businesses that need the funds.
For the first time in more than 60 years, starting this week, credit unions in the nation’s capital may be chartered through the District of Columbia government.
A new NCUA policy on counting servicemembers in determining whether a credit union is” low-income” is an illegal expansion of the limits Congress has placed on the institutions, the Independent Community Bankers of America charged Thursday.
“The NCUA’s changes–made without a formal rule subject to public review and comment–is another example of this captive regulator expanding the powers of credit unions well beyond the limits established by Congress to justify their tax exemption,” ICBA President/CEO Rebeca Romero Rainey said.