Friday, May 1, 2020

NCUA Writes Senator Crapo with Legislative Recommendations

In an April 29 letter to Senator Crapo (R-ID), National Credit Union Administration (NCUA) Chairman Rodney Hood identified legislative changes that would benefit the agency during the coronavirus-induced recession.

The recommended legislative changes can be divided into four areas: improving liquidity for credit unions, providing capital relief to credit unions, enhancing community lending activities, and increasing access for remote financial services delivery for credit unions.

Some of these recommended changes are temporary, while others are permanent.

For example, some of the temporary legislative recommendations sought by NCUA are:
  • to lower the net worth ratio for credit unions to be well capitalized and adequately capitalized from 7 percent to 6 percent and from 6 percent to 5 percent, respectively.
  • to raise the member business loan cap from 12.25 percent of assets to 20 percent assets during the recovery period.
The NCUA is requesting that Congress make permanent the temporary changes to the Central Liquidity Facility that was enacted in the CARES Act. NCUA also wants to permanently expand loan maturity limit for federal credit unions from 15 years to 30 years.

Other permanent changes to the Federal Credit Union Act include allowing all federal credit unions, just not multiple common-bond federal credit unions, to add underserved areas and to eliminate or significantly modify the reasonable proximity requirement to a service facility for a multiple common-bond federal credit union to serve select employee groups and associations.

Read the letter.

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