Regulator, insurers have ‘duty to ensure’ credit union resilience to climate change, NCUA leader asserts

Regulators and insurers of credit unions and other federal financial institutions “have a duty to ensure” the institutions they oversee remain resilient against financial risks due to climate-related events, among all material risks, the leader of the federal credit union regulator said Tuesday.

Speaking before an international group of credit union regulators, National Credit Union Administration (NCUA) Board Chairman Todd Harper said he recognized that the United States is “behind other countries when it comes to the issue of climate-related financial risk.” He noted, however, that his agency’s board in April issued a request for information (RFI) aimed at understanding stakeholders’ views and experiences on climate-related financial risk affecting federally insured credit unions.

“The issue of climate-related financial risk and the measures we have — and should — implement to mitigate that risk have taken on greater urgency in recent years,” Harper said. “And I look forward to learning from others on how you are addressing this issue in your nations and with your financial institutions.”

The RFI issued April 21 was approved on a vote of 2-1, with Harper and Board Member Rodney voting in favor, and Vice Chairman Kyle Hauptman voting against. Issued with a 60-day comment period, the RFI invites responses to 38 questions under such categories as: physical risk, transition risk, operations, governance, business strategies, risk management, reporting and targets, climate-related opportunities, suggestions for the NCUA, data gathering, and questions for the agency.

The RFI also discusses potential outcomes of an increased understanding of climate-related financial risks, among them possible impacts in the way the agency regulates and supervises federally insured institutions, field-of-membership considerations, and how the agency works with those particularly likely to face harm from climate events.

NCUA Chairman Todd M. Harper’s Remarks at the International Credit Union Regulators’ Network Annual Meeting