(June 11, 2021) Actions taken by the federal credit union regulator in April – extending temporary provisions giving credit unions some regulatory relief from savings surges during the coronavirus crisis – were reinforced by the agency late last week in a letter to federally insured credit unions.
NASCUS has prepared a summary of the letter, which is available now (members only).
In its Letter to Credit Unions (21-CU-04), the NCUA Board reminded credit unions that the actions it took in April — reducing the earnings retention requirement for credit unions classified as adequately capitalized, and permitting an undercapitalized credit union to submit a streamlined net worth restoration plan if it becomes undercapitalized predominantly because of share growth during the coronavirus crisis – are in effect until the end of March 2022.
The action taken in April was essentially an extension of a decision made in June 2020, which the agency said was taken in “anticipation that some federally insured credit unions may experience a temporary reduction in earnings and regulatory capital ratios due to their COVID-19 response efforts.” Those temporary modifications expired Dec. 31, 2020.
However, NCUA decided earlier this year to reintroduce the temporary changes, due to the continued impact of the COVID-19 pandemic, the agency said.