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NAFCU provides NCUA with recommendations, insights on climate-related risk
NAFCU wrote to the NCUA Monday to provide feedback in response to the agency’s request for information (RFI) on current and future climate and natural disaster risks to federally insured credit unions (FICUs).
NAFCU previously sent members a Regulatory Alert on the RFI to solicit credit union feedback.
In the letter, NAFCU Senior Regulatory Affairs Counsel James Akin urged the board to recognize the variety of climate risk profiles among the credit union industry and avoid attempts to issue comprehensive guidance on climate-related financial risk. In addition, Akin called on the agency to avoid issuing proposed regulation on this issue unless directed by Congress and, instead, defer to the Financial Oversight Stability Council (FSOC) as it formulates guidance to ensure that credit unions are not unfairly burdened by regulation in this area.
The letter also reviewed analysis conducted by NAFCU’s Research Team, which called into question the results of the NCUA’s assessment of the current risk to FICUs and their assets.
Akin reiterated the current steps credit unions are taking independently to manage climate-related financial risk and have been focused on financially vulnerable communities through efforts like the Greenhouse Gas Reduction Fund.
Relatedly, the International Sustainability Standards Board unveiled its final sustainability and climate-related disclosure standards on Monday, which would require disclosures on greenhouse gas emissions and other metrics.
NAFCU will continue to remain engaged with the NCUA on credit union priorities and monitor the agency’s regulations, reporting requirements, and supervisory approach in this area.