CUNA and Leagues write to NCUA Board

CUNA and Leagues write to NCUA Board

On March 19, CUNA, AACUL, and the state credit unions leagues wrote to Chairman Harper, Vice Chairman Hauptman, and Board Member Hood re: Rulemaking Aimed at PCA Relief.  The letter is to encourage the NCUA to provide additional relief to help credit unions facing prompt corrective action (PCA) challenges. 

Read the letter

Interim Final Rule to Provide PCA Relief
We appreciate Chairman Harper's remarks during the March 18 open Board meeting regarding potential relief in the area of PCA. In May 2020, National Credit Union Administration (NCUA) issued an interim final rule (2020 IFR)1 that provided credit unions relief related to PCA by:
• Permitting the NCUA Board to issue an order to temporarily waive the earnings retention requirement for any credit union classified as adequately capitalized; and
• Permitting credit unions to submit simplified net worth restoration plans if the reduction in capital was caused by share growth resulting from a temporary condition due to the pandemic.
The relief provided by the 2020 IFR was temporary, expiring December 31, 2020.
Consistent with the Chairman's recent remarks, we ask the NCUA to adopt an IFR essentially identical to the 2020 IFR adopted last year that provided relief to credit unions experiencing PCA issues related to an increase in share growth. The relief should remain in effect until the end of the pandemic as determined by the Centers for Disease Control (CDC) or other federal entity authorized to make such a determination.
We believe it is necessary and reasonable for the NCUA to adopt such a rulemaking. The NCUA adopted the 2020 IFR in May to deal with an increase in share growth, resulting from government stimulus payments. The reasons the 2020 IFR was adopted in May 2020 are still as relevant today, particularly with another round of federal stimulus payments on the way