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.

Hood Asks Congress to Boost Member Business Lending Cap and Decrease Capital Requirements

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%.

Harper: Don’t Change CU Capital Standards

Clashing with NCUA Chairman Rodney Hood, board member Todd Harper is asking Congress not to reduce credit union capital standards in response to the coronavirus crisis.

“Reductions in capital standards could ultimately lead to greater losses for the Share Insurance Fund, which all surviving federally insured credit unions would need to pay,” Harper wrote to leaders of the House and Senate committees with NCUA oversight powers.