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Senate Banking Committee Ranking Member Pat Toomey, R-Pa., Monday wrote to NCUA Board Chairman Todd Harper about a number of key credit union issues, including the agency's Modern Examination and Risk Identification Tool (MERIT), virtual examinations, and the National Credit Union Share Insurance Fund (NCUSIF). Toomey also sent a letter to CFPB Acting Director Dave Uejio raising concerns about the direction of the bureau.

NAFCU and a group of member credit unions from Pennsylvania previously met with Toomey to discuss opportunities to provide credit unions with much needed relief amid the ongoing pandemic.

MERIT and Virtual Exams

On MERIT, Toomey asked the agency whether the planned broader rollout of the program is on track to occur this year, highlighting the resources that went in to developing the program since 2015.  In its' 2021 Supervisory Priorities, the agency indicated that the effects of the pandemic have delayed the rollout but that all examiners will be trained on the program this year.

"While COVID-19 made it difficult for in-person examiner trainings to take place as the agency intended in 2020, it is important that NCUA move forward with a successful and full implementation of MERIT as soon as possible, even if training is done virtually," wrote Toomey. "A new resource for credit union examinations is long overdue as the financial services marketplace has drastically changed since the system was last updated over 25 years ago."

On virtual exams, Toomey urged the NCUA to accelerate its digital efficiency initiative noting that, if successfully implemented and used in tandem with MERIT, it would provide credit unions with flexibility and simpler examinations without sacrificing safety and soundness.

NAFCU has met with NCUA Board Member Rodney Hood, Chairman Harper, and senior staff in exam-related offices to discuss credit unions' exam concerns. The association has also requested the NCUA provide periodic updates on its exam modernization initiatives and recommended additional efforts while testifying on the agency's 2020-2021 budgets. The association will continue to support exam modernization and efficiency efforts to reduce credit unions' regulatory burdens.

NCUSIF

Toomey cited Harper's comments on the NCUSIF during the board's February meeting and asked for more details on any statutory changes and actions Congress would need to take to make changes to the NCUSIF. NAFCU Chief Economist and Vice President of Research Curt Long last week wrote leaders of the House Financial Services and Senate Banking Committees outlining the health of the fund, including why a premium is not warranted at this time, and urging against any amendments to the Federal Credit Union (FCU) Act that would change the way the NCUA manages the NCUSIF.

NAFCU has consistently advocated against charging credit unions a premium amid the coronavirus pandemic in order to keep resources with the institutions so they can provide the products, services, and flexibility needed to members struggling amid the crisis. The association will continue to advocate for a strong NCUSIF that is proactively managed with a goal of identifying and quantifying salient risks, which must be balanced with the understanding that credit union resources are scarce. 

CFPB

In his letter to Uejio, Toomey cited the acting director's statements via blog posts over the past two months outlining his priorities for the bureau and plans to "re-orient" its work. Toomey raised concerns about the bureau overstepping its authority related to its supervision and enforcement, data collection, and consumer complaint database. Toomey asked Uejio to clarify the bureau's plans to change its supervisory policies or practices, conduct Military Lending Act examinations, revisit the qualified mortgage rule, and more.

Relatedly, the Senate Banking Committee held a hearing with CFPB director nominee Rohit Chopra Tuesday.

As the credit union industry's best ACE, NAFCU continuously works to share credit unions' concerns with the Senate Banking Committee and the NCUA. Stay tuned for updates via NAFCU Today.