In a wish list sent to every office on Capitol Hill Tuesday, the Credit Union National Association renewed its call to allow expanded business lending by credit unions for one year to help businesses weather the coronavirus pandemic. A one-year exemption from the current Member Business Lending cap would open up some $5 billion for investment and could create as many as 50,000 jobs, CUNA said.
The National Credit Union Administration will work with the federal Export-Import Bank to help link credit unions with exporters in need of credit, the two agencies announced Tuesday.
The National Credit Union Administration decided to count military personnel in determining whether a credit union qualifies for a low-income designation without using the regulatory process required by law, the trade group representing the nation’s community bankers charged this week in a letter to the NCUA’s Inspector General.
In her letter, Independent Community Bankers of America President/CEO Rebeca Romero Rainey called on the IG to begin an investigation into whether the agency violated the Administrative Procedures Act, which requires that proposed rule changes must be open to public comment before they are adopted.
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%.
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.
The NCUA will now count military personnel in determining whether a credit union qualifies for the agency’s low-income designation.
NCUA Chairman Rodney Hood will join other financial regulators when they testify before the Senate Banking Committee on May 12.
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.