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The NCUA Board during its meeting yesterday approved some rules to provide credit unions with regulatory relief related to appraisals and ensuring credit unions remain operational and liquid amid the coronavirus pandemic.

"We thank NCUA Chairman Rodney Hood and Board Members Todd Harper and J. Mark McWatters for taking important steps toward ensuring credit unions can focus on serving their 120 million members as the coronavirus pandemic continues," said NAFCU President and CEO Dan Berger. "The agency's commitment to regulatory relief will help credit unions put needed funds in the hands of small businesses, families, and local communities by increasing flexibility for loan participations and eligible obligations. While this is a good first step, NAFCU will continue to push for additional relief for credit unions."

NAFCU has urged the agency to grant additional capital flexibility, place a moratorium on exams, and more, and will continue to advocate for additional relief and guidance.

The temporary final rule, approved unanimously, to provide regulatory relief will temporarily:

• increase the maximum aggregate amount of loan participations that a federally-insured credit union (FICU) may purchase from an originating lender without a waiver from their Regional Director to $5 million, or 200 percent of the FICU's net worth;
• suspend requirements to refinance certain purchased obligations and certain limitations on the types of eligible obligations that a federal credit union (FCU) may purchase and hold by permitting a FCU with a CAMEL 3 rating to purchase eligible obligations irrespective of whether the obligation belongs to the purchasing FCU's members.
• toll the required timeframes for the occupancy or disposition of properties not currently in use.

The temporary final rule takes effect once published in the Federal Register and will expire Dec. 31, 2020, unless extended.

In addition to this regulatory relief, the board also approved two rules related to appraisals:

• Interim final rule, real estate appraisal relief: Aligning it with a recent rule from the banking regulators, the board unanimously approved this rule to defer the requirement to obtain an appraisal or evaluation for up to 120 days following the closing of a transaction for certain residential and commercial real estate transactions in order to help credit unions offer immediate liquidity and credit to members amid the coronavirus pandemic.
• Final rule, residential real estate appraisal threshold: Approved on a 2-1 vote, this rule provides parity with banks by increasing the threshold level below which appraisals are not required for residential real estate transactions from $250,000 to $400,000. Instead of an appraisal, credit unions must obtain a written estimate of market value of the real estate collateral. NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt thanked the NCUA for the increase, which NAFCU had supported, adding that, "As safe and sound lenders, credit unions have proven time and time again that they do not engage in the same risky lending practices as banks. Given credit unions' strong history of always putting their members first, this rule will ensure they are not unfairly disadvantaged in the marketplace."

Earlier this week, the NCUA issued an interim final rule to provide credit unions with easier access to the Central Liquidity Facility (CLF). During Thursday's meeting, the board received a briefing on what the rule entails.