The Democratic member of the National Credit Union Administration (NCUA) Board last week outline five priorities for congressional action to better equip the agency to contain the impact on the credit union industry of the coronavirus (COVID-19) pandemic.
Delivering remarks remotely to the annual meeting of the Mountain West Credit Union Association, NCUA Board Member Todd Harper on Thursday said that while federally insured credit unions were strong at the outset of the pandemic, the industry must be prepared “for the economic impact that is coming.”
His five priorities for action by the U.S. Congress include:
- Making the Central Liquidity Facility provisions in the Coronavirus Aid, Relief and Economic Security Act (CARES Act) permanent or extending their sunset by at least one year to Dec. 31, 2021;
- Allowing all member business loans (MBLs) made during the public health emergency to be temporarily exempt from the MBL cap;
- Seeking an additional $10 million in appropriations to the Community Development Revolving Loan Fund (CDRLF) for emergency grants to low-income credit unions;
- Allowing all federally chartered credit unions to add underserved areas to their fields of membership; and
- Reauthorizing the NCUA to supervise credit union third-party vendors.
Harper said changes affecting the CLF under the CARES Act make it easier for natural-person credit unions and corporate credit unions to join the facility and provide the credit union system with a sustainable source of liquidity during the pandemic.
The agency has noted that the facility’s ability to borrow to meet system liquidity needs, which can also include needs of the National Credit Union Share Insurance Fund (NCUSIF), increases as more credit unions join it.
“Ultimately, we have a vital opportunity to significantly bolster the entire credit union system’s access to external liquidity for the remainder of the year, but we need to move quickly to capitalize on our new expanded flexibilities and position ourselves ahead of emerging needs,” Harper said. “For these reasons, I strongly encourage all consumer and corporate credit unions that do not already belong to the Central Liquidity Facility to join as soon as possible, either as regular members or through an agent.”
NCUA’s Harper: Credit Unions Are Strong, but COVID-19 Presents Challenges