(June 25, 2021) Allowing otherwise healthy credit unions to continue to focus on serving their members through rules providing regulatory relief from prompt corrective action has once again won the support of the state system, NASCUS said in a comment letter filed late last week.
NASCUS filed the comment on NCUA’s temporary regulatory relief rule in response to COVID-19-prompt corrective action, which took effect April 19. The rule allowed NCUA to waive the earning retention requirement for any federally insured credit union classified as adequately capitalized. It also allowed certain qualifying undercapitalized FICUs to submit simplified net worth restoration plans (NWRPs). The rule extended action taken in spring 2020 as the financial impact of the pandemic became apparent.
“The extraordinary effects of the COVID-19 pandemic and subsequent government efforts to mitigate the resulting economic dislocation strained the regulatory capital of some otherwise healthy credit unions,” NASCUS wrote. “The changes made by the IFR provide targeted regulatory relief without unduly increasing risk to the share insurance fund.”