At its Thursday meeting via live audio webcast, the NCUA Board unanimously approved two items:
- a temporary interim final rule permitting federally insured credit unions to use asset data as of March 31, 2020 to determine the applicability of certain regulatory asset thresholds during calendar years 2021 and 2022; and
- an interim final rule making conforming changes to the agency’s regulations on the Central Liquidity Facility because of the Consolidated Appropriations Act, 2021.
Todd M. Harper, NCUA chair, in addition to board members Rodney Hood and Kyle Hauptman, also commented on the one-year anniversary of operating under the COVID-19 pandemic and related restrictions and economic slowdown, the effects it has had on NCUA and credit unions and reasons to be optimistic looking forward, according to CUTODAY.
“None of us could have anticipated the extraordinary circumstances,” Harper said. “There has been tremendous resilience under the most trying of circumstances.”
Throughout 2020, federally insured credit unions experienced unprecedented balance sheet growth, due to increased personal savings rates, declining loan demand and economic stimulus because of the COVID-19 pandemic, according to the NCUA. Many credit unions have or will exceed asset thresholds subjecting them to additional regulatory requirements or supervision by the Office of National Examinations and Supervision.
The temporary interim final rule permits federally insured credit unions to use asset data as of March 31, 2020, to determine applicability of capital planning and stress testing requirements under the NCUA’s regulations, and the data will also determine regional or national supervision of federally insured credit unions.
The NCUA Board noted that complying with the new regulatory standards “may impose additional compliance costs for credit unions that otherwise may not have become subject to these requirements at this time,” however the interim final rule gives affected credits unions time to prepare for additional regulatory standards.
Conforming with the Consolidated Appropriations Act, 2021
The Board approved an interim final rule that updates the NCUA’s regulations to conform with the statutory changes made by the Consolidated Appropriations Act, 2021, signed into law on December 27, 2020.
The Consolidated Appropriations Act extended several enhancements to the NCUA’s Central Liquidity Facility, first enacted by the CARES Act, and this rule amends the NCUA’s Central Liquidity Facility regulation to reflect these extensions, according to the NCUA. This rule also extends the withdrawal from Central Liquidity Facility membership provisions that the Board included in its April 2020 interim final rule.
The NCUA Board also received a briefing on the financial performance of the agency’s Guaranteed Notes and the asset management estates that comprise the agency’s Corporate System Resolution Program, of which approximately 2,000 credit unions will receive a distribution. Additional information on the distribution can be found on the NCUA website.