NCUA letter outlines regulatory relief for CUs, now in effect through Dec. 31


NCUA’s interim temporary rule granting measures of regulatory relief aimed at ensuring federally insured credit unions remain operational and liquid during the COVID-19 pandemic, goes into effect today. The rule was published in today’s Federal Register and will be in place until December 31, 2020, unless extended by the NCUA board.

A letter from NCUA Chairman Rodney Hood to federally insured credit unions provided a recap of information about the temporary regulatory relief and stated that the “COVID-19 pandemic is affecting credit unions and their members in unprecedented ways. During this time, the NCUA is endeavoring to provide as much certainty and relief to credit unions, while still meeting the agency’s goal of protecting credit unions and the consumers who own them.”

The NCUA board of directors unanimously approved the temporary final rule  at its April 16 meeting, as previously reported. The rule temporarily raises the maximum aggregate amount of loan participations that a federally insured credit union may purchase from a single originating lender without needing a waiver from an NCUA regional director. Under this final rule, the aggregate loan participation amount from a single originating lender will be the greater of $5 million or 200 percent of a federally insured credit union’s net worth.

The rule also temporarily suspends limits on the types of eligible obligations that a federal credit union may purchase and hold, and under the rule, a federal credit union no longer has to refinance a purchased obligation so that it matches the types of loans the credit union is allowed to make, according to NCUA.

Also published in the Federal Register today was an additional interim final rule that will temporarily defer real estate-related appraisals and evaluations under the agency’s appraisal regulations, because the public health crisis and social distancing directives have created difficulties for lenders to obtain required appraisals on a timely basis.

Additionally, a final rule passed by the NCUA board increases the threshold level below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000.

Comments are currently being accepted on the rules. More information is available on NCUA’s website.


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