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NAFCU President and CEO Dan Berger and NCUA Chairman Rodney Hood Monday discussed credit union concerns and priorities on a number of issues, including the Small Business Administration's (SBA) paycheck protection program (PPP), exam and capital relief, and funding for Community Development Financial Institutions (CDFI) and the Community Development Revolving Loan Fund (CDRLF).

NAFCU Chief Economist and Vice President of Research Curt Long and Director of Regulatory Affairs Ann Kossachev, and Chairman Hood's Chief of Staff Lenwood Brooks and Senior Advisor to the Chairman for Communications and Engagement Evann Berry also joined the call.

PPP

NAFCU has been working closely with the SBA, Treasury Department, and Congress to share credit unions' experiences with the PPP, which reopened with additional funding last week.

The NCUA, via a Letter to Credit Unions, has previously indicated that it will not criticize institutions' good-faith efforts to prudently use the paycheck protection program.

The association has also requested more guidance and resources for the PPP, especially as it relates to loan forgiveness and future funding.

NAFCU has been at the forefront of the fight to ensure credit unions are able to access PPP funds to serve their small business members affected by the coronavirus pandemic.

Exam and Capital Relief

NAFCU has previously requested that the NCUA provide additional examination flexibility and make other regulatory adjustments to alleviate the strict compliance requirements currently in place to ensure credit unions can focus on helping members during the pandemic.

The NCUA recently issued a Letter to Credit Unions letting credit unions know examiners will be reaching out beginning this week through May 18 to discuss the impact the coronavirus is having on operations and members. The agency also outlined its priorities for exams during the coronavirus pandemic, indicating it would encourage examiners to work with credit unions focused on providing uninterrupted services and relief to members.

NAFCU has also sought relief for credit unions from the current expected credit loss (CECL) standard amid the pandemic. Since 2016, NAFCU has continuously urged the Financial Accounting Standards Board (FASB) to exempt credit unions from the standard due to their unique capital framework and the negative impact the standard could have on the industry.

Hood last week showed his support and called on FASB to exempt credit unions from CECL. Hood also wrote to Senate Banking Committee Chairman Mike Crapo, R-Idaho, speaking out in support of greater relief for the credit union industry, including many of the recommendations made by NAFCU.

NAFCU has led efforts to ensure credit unions and their members benefit from a modern capital regime and has also requested that the NCUA permanently grandfather "excluded goodwill" and "excluded other tangible assets" in its risk-based capital calculation.

CDFI/CDRLF Funding

The NCUA last month committed the majority of the 2020 CDRLF to provide coronavirus assistance to low-income credit unions, increasing its original allotment to $1.3 million. Eligible credit unions can apply for these emergency response grants through May 22 using the NCUA's CyberGrants portal.

As Congress considers relief efforts, NAFCU has advocated for additional emergency funds for the CDFI and CDRLF “as they are important tools for credit unions to have access to funds to help those in underserved and lower-income areas.” 

The NCUA's streamlined CDFI application process is currently open until May 31. The program guide to apply is available here.

NAFCU will continue to remain in close contact with the agency during the coronavirus pandemic to share credit unions' experiences, and has previously had conversations with Board Members NCUA Board Members Todd Harper and J. Mark McWatters.

To see all NAFCU's coronavirus-related advocacy and resources so far, visit its dedicated coronavirus page.