In video testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, NCUA Board Chairman Rodney Hood provided a state-of-the-industry update and outlined the agency’s efforts to provide regulatory relief and guidance to credit unions during the COVID-19 public health crisis.

Hood said that regulating and supervising 5,236 federally insured credit unions with nearly 120.4 million member-owners and more than $1.5 trillion in assets are the agency’s “paramount responsibility” and one it takes seriously.

Noting that the financial performance data presented in his testimony was pre-COVID-19 and based on the agency’s most recent call report data from the fourth quarter of 2019, Hood said that the pandemic will affect credit union performance in 2020.

“The new hurdles imposed by the pandemic, including social distancing requirements, the myriad of state and local restrictions, and the national scope of the emergency, has required the agency to identify new methods for supporting credit unions and for maintaining the safety and soundness of the system,” Hood stated.

Hood said that NCUA is modifying its examination and supervision program to address the new economic and operational changes resulting from the COVID-19 pandemic, and assessing emerging risks, including the likelihood of elevated liquidity and credit risk, and the risk exposure to individual credit unions, the system as a whole and the Share Insurance Fund.

In response to the COVID-19 pandemic, NCUA is focusing on three supervisory priorities, Hood said. “These support our enhanced offsite, forward-looking supervision and allows us to timely identify credit unions that are experiencing financial or operational difficulties or will face them in the near future.”

• The first priority is to provide assistance to those credit unions with immediate operational or financial needs.
• The second priority includes working with credit unions and state regulators to identify operational and financial challenges. Examiners are periodically contacting each credit union to discuss their individual operational and financial status, including any associated challenges and needs.
• Third, since the NCUA mandated a strict offsite examination and supervision approach on March 16, 2020, examination staff has been working with credit unions to obtain documentation and complete examination procedures offsite. “Even so, the NCUA will limit the burden imposed on credit unions so they can focus on providing uninterrupted service to their members,” Hood said.

Hood’s complete testimony can be accessed on NCUA’s website.