Temporary PCA rule changes in effect now for credit unions; comments due June 29

An interim final rule that relieves credit unions of the earnings transfer requirement when they drop from “well capitalized” to “adequately capitalized” status and eases net worth restoration plan documentation for “undercapitalized” credit unions takes effect Thursday and remains in effect through Dec. 31.

The interim final rule, issued last week by the National Credit Union Administration (NCUA) Board and out for comment until June 29, is one of the actions taken by the agency to help ensure that federally insured credit unions (FICUs) remain operational and liquid during the COVID-19 crisis.

The interim rule makes two temporary changes to the agency’s prompt corrective action PCA rules: it temporarily enables the NCUA Board to issue an order applicable to all FICUs to waive the earnings retention requirement for any FICU that is classified as adequately capitalized; and it modifies the rules waiving specific content requirements for net worth restoration plans (NWRPs) submitted by FICUs that become undercapitalized predominantly as a result of rapid share growth due to COVID-19.

The interim rule was published in the Federal Register Thursday.

RR: Temporary Regulatory Relief in Response to COVID-19 – Prompt Corrective Action