To ease coronavirus’ financial effects, CUNA sends recs to NCUA, CFPB
WASHINGTON, DC (March 12, 2020) — In an effort to ease the financial effects that coronavirus disease (COVID-19) has on individuals and communities, Credit Union National Association (CUNA) today sent letters to the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB), asking the agencies to implement policies that would allow credit unions to better serve members.
Greater flexibility to meet member needs
In a letter to NCUA Chairman Rodney Hood, CUNA President/CEO Jim Nussle encouraged the regulator to allow for flexibility as credit unions continue to comply with the agency’s regulations while addressing social distancing recommendations.
“We anticipate the challenges facing credit unions and their members will get worse before they get better, as it is clear we are in the early stages of this public health issue,” the letter reads. “The coronavirus has already and will continue to strain the broader economy. However, as often in the time of such challenges, there is an opportunity for credit unions to exemplify pro-consumer financial services.”
CUNA recognized the statement issued earlier this week by the NCUA and other federal financial regulators encouraging financial institutions to meet the financial needs of customers and members affected by the coronavirus, but proceeded to offer several specific areas where the NCUA can ease the challenges facing credit unions during this time.
- Examination cycle flexibility: In light of staffing and other challenges, CUNA asks the NCUA to provide additional information explicitly detailing that credit unions have flexibility in the number and/or type of individuals required to be on site during an examination, as well as flexibility in delaying an examination altogether.
- Capital forbearance: As a direct and indirect result of the coronavirus, credit union members may experience difficultly in making timely personal, credit card, automobile, small business, or other loan related payments. CUNA requests that the NCUA provide flexibility in its assessment of those credit unions experiencing financial challenges as a result of the coronavirus.
- Virtual board and membership meeting guidance: The Federal Credit Union Act (FCUA) provides strict requirements on when and how a credit union board must meet; it also provides requirements for an annual meeting of the credit union membership. CUNA recommends that the NCUA provide guidance on virtual board meetings and whether membership meetings scheduled during this crisis could be conducted virtually.
Serving those affected abroad
In a separate letter to CFPB Director Kathy Kraninger, Nussle encouraged the Bureau to take steps to make it easier for credit unions to meet the needs of members sending funds to those affected by COVID-19 abroad. CUNA is requesting that the Bureau expedite its final remittance rule to increase the “normal course of business” safe harbor to make an accommodation for transfers sent to individuals in countries affected by the growing public health concerns surrounding the pandemic.
“Due to the person-to-person nature of remittance transfers, the recipients often use these transferred funds to go about their everyday life, such as to purchase necessary goods, food, services, and even medical care,” Nussle said. “The importance of this lifeline can often be amplified in times of global economic downturn, natural disaster, and pandemic.”
CUNA maintains that the CFPB’s proposed “normal course of business threshold” is too low and would be most appropriate if set to 1,000 transfers. With the financial well-being of global communities at stake, consumers will need the ability to expeditiously and easily transfer funds without onerous red tape.
Emergency Development Funding
On Wednesday, Nussle also wrote to House and Senate Appropriations Committee leadership requesting lawmakers make available additional funds for those individuals and businesses affected by the COVID-19 emergency. Nussle’s letter recommended that the Community Development Financial Institutions (CDFI) Fund and the Community Development Revolving Loan Fund (CDRLF) be given an emergency infusion of funds, $300 million and $3 million respectively, separate and apart from fiscal year 2021 funding.
Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by 120 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit cuna.org. To find your nearest credit union, visit YourMoneyFurther.com.