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ALEXANDRIA, Va. (June 2, 2020) – National Credit Union Administration (NCUA) Chairman Rodney E. Hood issued the following statement today reflecting on the death of George Floyd and current events:

“As the first African-American to lead a federal banking agency, I feel compelled to speak following the tragic death of George Floyd. Over the past few months, communities across the country have been overwhelmed with challenge and uncertainty. Besides being on the heels of a global pandemic, we are also experiencing heightened levels of strife following yet another instance of abuse of authority and violence against a black man.

For me, these discussions are more than simply abstracts — they are personal to me. In my banking career, I’ve attended conferences and professional events where I was the only man of color in the room. I’ve arrived early to speak on a panel discussion, and people were surprised to learn that I was a participant. I vividly remember the conversations with my father about how to engage with police when pulled over, and my mother performing safety checks on my car before I went out on the weekends to ensure the signal and brake lights were all functioning properly. In 2020, I find myself having similar conversations with my young African-American cousins.

As an African-American man, I am shocked and appalled and share the heartbreak of many in the black community. I am all too familiar with the anger and frustration that comes with the everyday challenges and realities surrounding race. While I pray for justice, healing, and peace for our nation and for the family and loved ones of George Floyd, I am also encouraging everyone to have difficult conversations and to look for ways to promote diversity and inclusion within our communities. Individually and collectively, we can make a difference — one conversation and relationship at a time.

At the NCUA, we are striving for ways to lead on these issues. One of the top priorities for my chairmanship is financial inclusion, which means expanded access to the financial mainstream for underserved communities as well as diverse hiring, contracting and board membership. I also called for the creation of the NCUA Culture, Diversity, and Inclusion Council to focus on issues of inclusion within the agency. True inclusion within our financial regulators, financial institutions and communities is a goal we all must strive towards. Diversity is important, but without cultural change that encourages true inclusion, it risks being little more than checking the right boxes.”

Member Deposits Remain Protected up to $250,000 by the Share Insurance Fund

ALEXANDRIA, Va. (May 29, 2020) – The National Credit Union Administration today liquidated IBEW Local Union 712 Federal Credit Union in Beaver, Pennsylvania.  

West Penn P&P Federal Credit Union of Beaver, Pennsylvania, immediately assumed IBEW Local Union 712 Federal Credit Union’s assets, member shares, and loans. West Penn P&P Federal Credit Union is a federally chartered credit union with 2,150 members and assets of nearly $14.8 million, according to the credit union’s most recent Call Report.

The new West Penn P&P Federal Credit Union members will experience no interruption in services, and accounts remain insured by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

Members with questions about their accounts may contact West Penn P&P Federal Credit Union at 724.774.9237 between 8:30 a.m. and 5 p.m., Monday through Friday.

At the time of liquidation and subsequent purchase by West Penn P&P Federal Credit Union, IBEW Local Union 712 served 2,935 members and had assets of approximately $7.7 million, according to the credit union’s most recent Call Report. Chartered in 1964, IBEW Local Union 712 Federal Credit Union served members of IBEW Local Union 712. 

IBEW Local Union 712 Federal Credit Union is the first federally insured credit union liquidated in 2020.

ALEXANDRIA, Va. (May 28, 2020) – Credit unions can significantly bolster the entire system’s access to emergency liquidity by joining the Central Liquidity Facility, National Credit Union Administration Board Member Todd M. Harper said.

“Through my experiences in working on Capitol Hill during the last financial crisis, I knew disruption in the financial markets could quickly turn into liquidity shortfalls,” Board Member Harper said. “I strongly encourage all consumer credit unions that do not already belong to or have access to an agent for the Central Liquidity Facility to join as soon as possible. By joining the CLF, you will be demonstrating the best of the cooperative nature of the credit union movement.”

Harper made these remarks remotely during the Credit Union National Association’s Examination and Supervision Committee Meeting on Thursday, May 21. The full text of his remarks is available on the NCUA’s public website.

During his speech, Harper stated that the CARES Act temporarily makes it easier for credit unions to join the Central Liquidity Facility, including corporate credit unions to act as agents for consumer credit unions. The law also eased some restrictions around getting a liquidity loan and temporarily increased the capacity of the CLF from 12 times its capital to 16 times its capital through the end of 2020. According to Harper, this represents an opening to bolster the credit union system’s access to external liquidity.

Continue Focusing on Members

Harper also outlined the financial impact COVID-19 is having on the broader economy. He noted the sharp and rapid deterioration in labor market conditions, lost wages, and heightened uncertainty means the economy may not return to pre-coronavirus levels for some time. This will necessitate credit unions continuing to work with their members who have been affected by the pandemic’s financial and economic disruptions, he said.

“Consistent with safety and soundness and consumer financial protection, I encourage you to continue to develop products and services aimed at helping families pay for essential needs,” Harper said. “By focusing on your members, making responsible loans, accommodating their needs, your members will remember it in the long term.”

PCA Changes Will Provide Flexibility

Harper also discussed the NCUA Board’s recent changes to the agency’s prompt corrective action requirements. Approved during the Board’s May meeting, the first amendment will waive the earnings transfer requirement for credit unions that fall from well capitalized to adequately capitalized. This change will allow the credit union to use the capital to help their members. The second change creates a streamlined net worth restoration plan for credit unions that become undercapitalized because of an inflow of shares.

Both the earnings transfer waiver and the net worth restoration plan provisions will expire at the end of 2020.

ALEXANDRIA, Va. (May 26, 2020) – In a recent letter, National Credit Union Administration Chairman Rodney E. Hood wrote to the Federal Communications Commission regarding a third-party petition to permit certain automated calls to fall under the Emergency Purposes Exception of the Telephone Consumer Protection Act. The types of automated calls outlined in the petition include options for loan modifications, changes to how consumers access their institution’s services, and warnings about potential fraud.

“The NCUA has supported and encouraged federally insured credit unions in their efforts to provide credit union members with prudent debt relief and help members understand the range of relief possibilities,” Chairman Hood wrote. “Autodialed calls providing information about payment deferrals, fee waivers, loan term extensions, other loan modifications, and forbearance could assist consumers during this challenging time.”

In the letter, Hood noted that financial institutions are not seeking permission to use automated calls related to advertising, telemarketing, or seeking payment on a debt. Like other financial institutions, federally insured credit unions must comply with all other consumer protection laws governing autodialed calls. The Consumer Financial Protection Bureau has also contacted the FCC.

Chairman Hood’s letter to FCC Chairman Ajit Pai is available on the NCUA’s website.

Register Now to Learn Best Practices for a Strong BSA Compliance Program

ALEXANDRIA, Va. (May 27, 2020) – Credit unions will receive valuable information on best practices in Bank Secrecy Act programs and avoiding pitfalls from non-compliance during a National Credit Union Administration webinar, “The Bank Secrecy Act: Review and Reminders,” scheduled for June 17.

This 90-minute webinar is scheduled to begin at 3 p.m. Eastern. Online registration is available here (opens new window). Participants will use this same link to log into the webinar and should allow pop-ups from this website. There is no charge to participate.

The webinar panel — Andrew Bludorn, BSA officer with the NCUA’s Office of Examination and Insurance; Damon Frank, trial attorney with the NCUA’s Office of General Counsel; and Cathryn Martin, assistant vice president and BSA compliance officer with Tower Federal Credit Union — will cover the top five compliance concerns and discuss elements of a strong BSA/anti-money laundering program, including:

• Timely §314a searches;
• BSA training for appropriate staff; and
• Real-world case studies of BSA compliance failures.

You can submit questions in advance at [email protected]. The email’s subject line should read, “The Bank Secrecy Act: Review and Reminders.” Participants with technical questions about accessing the webinar may email [email protected].

This webinar will be closed captioned and then archived here approximately three weeks following the live event.

NCUA’s Office of Credit Union Resources and Expansion supports low-income-designated credit unions and credit unions interested in a low-income designation; minority credit unions; credit unions seeking changes in their charters, bylaws, or fields of membership; and groups organizing to start new credit unions.

ALEXANDRIA, Va. (May 26, 2020) – During an on-demand webinar released today by the National Credit Union Administration, credit unions will get valuable information on the regulatory and legislative enhancements made to the Central Liquidity Facility.

This approximately 40-minute webinar is available on the agency’s website (opens new window). Participants should allow pop-ups from this website.

During the webinar, Owen Cole, President of the Central Liquidity Facility, explains how the facility works and how it fits within a credit union’s broader liquidity risk-management program. He also provides an overview of recent changes to the Central Liquidity Facility made by the CARES Act and the NCUA Board.

NCUA Chairman Rodney E. Hood also provides introductory remarks during the webinar and encourages credit unions to consider joining the facility.

“While we hope for the best outcome, we must prepare for the possibility the Central Liquidity Facility will be a vital resource to help credit unions respond to the consequences of the COVID-19 pandemic,” Chairman Hood said. “The NCUA encourages any credit union that is not a member to join the Central Liquidity Facility.”

The Central Liquidity Facility is a mixed-ownership government corporation created to improve the financial stability of federally insured credit unions. It provides the credit union system a vital contingent source of funds to assist with system-wide liquidity events. Member credit unions own the Central Liquidity Facility, which exists within the NCUA. Joining the facility is voluntary.

For additional information about joining the Central Liquidity Facility, please visit www.ncua.gov/clf or email [email protected].

ALEXANDRIA, Va. (May 22, 2020) – National Credit Union Administration Chairman Rodney E. Hood issued the following statement as the nation marks the Memorial Day holiday.

“Originally called “Decoration Day,” Memorial Day began as a way to use spring flowers to honor those who gave their lives for our country. But the real reason we commemorate Memorial Day can be found in the Declaration of Independence: “life, liberty, and the pursuit of happiness.” That’s why there’s no more fitting way to honor those who gave the ultimate sacrifice than to celebrate the things they died for: life in all its richness; liberty to exercise our choices; and the pursuit of happiness through freedom, family, community, opportunity, and equality.

“Largely because of the sacrifices made by those who died while serving their country, we enjoy each of these blessings every day. And indeed, these blessings are proof that life will go on despite the COVID-19 pandemic. Though the pandemic has had a devastating and profound impact on our daily lives, and the country as a whole, we know that America will overcome this unprecedented challenge, and undoubtedly emerge stronger for it.

“This Memorial Day weekend, while we honor the men and women who gave the ultimate sacrifice for our country, I would like to thank the 1,141 employees of the NCUA for their unwavering dedication and commitment to highest ideals of public service.”

Board Action Bulletin

ALEXANDRIA, Va. (May 21, 2020) – The National Credit Union Administration Board held its fourth open meeting of 2020 today using a live audio webcast and unanimously approved two items:

• An interim final rule that makes two temporary changes to the agency’s prompt corrective action regulations providing relief to credit unions that temporarily fall below well capitalized.
• A proposed rule that would provide an alternative method to satisfy the membership card or account signature card requirement.

The Board considered and then tabled an interim final rule that would have permanently amended one of the requirements that a federal credit union must adopt as a part of their written overdraft policy.

The agency’s Acting Chief Financial Officer also briefed the Board on the National Credit Union Share Insurance Fund’s financial performance in the first quarter of 2020.

Changes to Prompt Corrective Action Provide Regulator Relief

The NCUA Board unanimously approved an interim final rule (opens new window) that makes two temporary changes to the agency’s prompt corrective action regulations that provide relief to credit unions that temporarily fall below well capitalized.

“Because of the pandemic, I am concerned that credit unions may temporarily fall below the well-capitalized level and become subject to various prompt corrective action requirements, NCUA Chairman Rodney E. Hood said. “This rule provides relief to those that experience a decline in their net worth ratio because of efforts to help their members or because they have experienced a rapid increase in shares because of the flight to safety.”

This interim rule temporarily reduces the earnings retention requirement for credit unions classified as adequately capitalized. Those credit unions unable to meet the earnings retention requirement will not have to submit a written application requesting approval to decrease its earnings retention amount. If a credit union poses an undue risk to the Share Insurance Fund or exhibits material safety and soundness concerns, the appropriate NCUA Regional Director may require the credit union to submit an earnings transfer waiver request.

These temporary modifications will remain in place until December 31, 2020. By statute, credit unions that fall to less than adequately capitalized must submit a net worth restoration plan to their NCUA Regional Director. The interim final rule temporarily permits an undercapitalized credit union to submit a streamlined net worth restoration plan, demonstrating that the reduction in capital was caused predominantly by share growth and that this is a temporary condition because of the pandemic. If a credit union becomes less than adequately capitalized for reasons other than share growth, they must still submit a net worth restoration plan under the current requirements in NCUA’s regulations.

The interim final rule amending NCUA’s prompt corrective action requirements is effective upon publication in the Federal Register, and there is a 30-day comment period.

Joint-Account Insurance Coverage Proposal Would Reduce Uncertainty

The NCUA Board unanimously approved a proposal that would amend the NCUA’s regulation governing the requirements for a share account to be separately insured as a joint account.

Specifically, the proposed rule (opens new window) would provide an alternative method to satisfy the membership card or account signature-card requirement. The proposal amends the regulation to explicitly provide that the signature-card requirement could be satisfied by information contained in the account records of the insured credit union.

For example, under this proposal, the requirement could be satisfied by evidence that a federally insured credit union has issued a debit card to each co-owner of the account or evidence that each co-owner of the account has conducted transactions using the share account. The proposed rule, if adopted, would assist the NCUA in promptly determining account ownership and level of share insurance coverage for each owner in the event a federally insured credit union’s failure, helping to alleviate delays and uncertainty for members. The proposal would apply to all federally insured credit unions and would not impose any increased burden or new recordkeeping requirements for joint accounts.

Comments on this proposed rule are due 30 days after the publication in the Federal Register.

Share Insurance Fund’s Total Assets Increases

The Share Insurance Fund reported a net income of $1.2 million and a net position of $17.5 billion for the first quarter of 2020. The fund’s total assets increased to $17.7 billion at the end of the quarter from $16.7 billion at the end of the fourth quarter of 2019.

For the first quarter of 2020:

• The number of CAMEL codes 4 and 5 credit unions decreased to 175 from 190 at the end of the fourth quarter of 2019. Assets for these credit unions decreased from the fourth quarter of 2019 to the first quarter of 2020, from $10.8 billion to $10.4 billion.
• The number of CAMEL code 3 credit unions decreased to 812 from 838 at the end of the fourth quarter of 2019. Assets for these credit unions increased 2 percent from the fourth quarter of 2019, to $42.6 billion from $41.7 billion.

The first-quarter figures (opens new window) are preliminary and unaudited.

Overdraft Proposal Tabled

The NCUA Board considered an interim final rule (opens new window) that would have permanently amended one of the requirements that a federal credit union must adopt as a part of their written overdraft policy.

The Chairman offered a motion to approve the proposed interim final rule, and it lacked a second. Because this item was tabled, the Chairman reserves the right to bring it before the NCUA Board again.

“While it is rare for an open Board meeting to include an item that does not pass, it does occasionally happen,” said NCUA Chairman Rodney E. Hood. “If I only bring forth ideas to the Board that we know we have the votes for, it does not allow for an honest, open, and full debate. I brought this issue forth because I believe it is important. And the public has a right to transparency on this matter.

“This interim final rule should be approved because the problem is now. The other Board members disagreed. However, the Office of the General Counsel determined that today’s rule was appropriate as an interim final rule and did not violate the Administrative Procedure Act. Therefore, I reserve my right as Chairman to have the Board reconsider this rule if the public thinks this is important.”

The NCUA tweets all open Board meetings live. Follow @TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.

ALEXANDRIA, Va. (May 22, 2020) – National Credit Union Administration Chairman Rodney E. Hood issued the following statement regarding Comptroller Joseph Otting’s announcement that he is stepping down as Comptroller of the Currency.

“Having known Joseph for many years prior to our time as federal financial regulators, I have witnessed firsthand his resilient commitment and significant impact on the financial services industry.

“I commend him for his leadership and service to our nation and to the Office of the Comptroller of the Currency. Under his leadership, the agency has grown and thrived with its renewed focus on economic opportunity and regulatory reform.

“It has indeed been an honor to serve alongside him, and I wish him all the best in his future endeavors.”

(May 20, 2020) – The federal financial institution regulatory agencies today issued principles for offering small-dollar loans in a responsible manner to meet financial institutions customers’ short-term credit needs.

The Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency recognize the important role that responsibly offered small-dollar loans can play in helping customers meet their ongoing needs for credit from temporary cash-flow imbalances, unexpected expenses, or income shortfalls, including during periods of economic stress, natural disasters, or other extraordinary circumstances such as the public health emergency created by COVID-19.

The agencies are issuing the “Interagency Lending Principles for Offering Responsible Small-Dollar Loans” to encourage supervised banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.

A March 26 joint agency statement encouraged banks, savings associations, and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19.

Attachment: Joint Principles

Agency	Contact	Phone
Federal Reserve Board	Susan Stawick	202.452.2955
FDIC	Brian Sullivan	202.412.1436
NCUA	Laura Todor	703.518.1149
OCC	Bryan Hubbard	202.649.6870