June 18, 2021
Secretary of the Board
National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314
Re: NASCUS Comments on Temporary Regulatory Relief Rule in Response to COVID-19-Prompt Corrective Action
Dear Secretary Conyers-Ausbrooks:
The National Association of State Credit Union Supervisors (NASCUS) submits this letter in response to the National Credit Union Administration’s (NCUA) request for comments on RIN 3133-AF19, Temporary Regulatory Relief Rule in Response to COVID-19-Prompt Corrective Action. The Interim Final Rule (IFR) amends NCUA’s Prompt Corrective Action (PCA) rules to help credit unions remain liquid and serve their members. Effective April 19, 2021, the IFR amended § 702.201 to temporarily enable NCUA to issue an order applicable to all federally insured credit unions (FICUs) waiving the earnings retention requirement for any FICU classified as adequately capitalized and § 702.206(c) to allow certain qualifying undercapitalized FICUs to submit simplified Net Worth Restoration Plans (NWRPs). These changes are substantially similar to changes enacted in a May, 2020, NCUA IFR to address similar issues during the beginning of the pandemic.
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. The changes made by the IFR provides targeted regulatory relief without unduly increasing risk to the share insurance fund.
NASCUS supported NCUA’s changes to the retained earnings and NWRP provisions of Part 702 in 2020, and we do so again now. In particular, we support the extension of the change to § 702.201 related to retained earnings thru March 31, 2022. The 2020 IFR sunset the relief provided under this provision on December 31, 2020. At the time we shared our concern that the year-end termination of the amendment might be too conservative given the scope and possible duration of the pandemic. Extending the reenacted retained earnings relief through March 2022 provides FICUs greater flexibility to manage balances sheets impaired by the pandemic. While NASCUS fervently hopes that the pandemic recovery is well underway by next year, we would support an even longer-term than March 31, 2o22 (even extending it indefinitely until the end of the pandemic). Should NCUA resolve to retain the March 2022 deadline as presented in the IFR, we encourage the agency to evaluate the need for an extension before the March 2022 deadline.
Once again, NCUA has issued pandemic-related regulatory relief as an interim final rule. As we did in 2020, we concur that good cause exists to exercise this exception to the Administrative Procedure Act and that prior public notice in this case is unnecessary.
NASCUS commends NCUA for providing FICUs a measure of regulatory relief with respect to prompt corrective action in light of the continued efforts to combat the pandemic. This IFR will allow otherwise healthy credit unions to continue to focus on serving their members. We encourage NCUA to continue to work with stakeholders and state regulators to identify additional needed regulatory relief are happy to discuss our views at NCUA’s convenience.
 NASCUS is the professional association of the nation’s 45 state credit union regulatory agencies that charter and supervise over 2,000 state credit unions. NASCUS membership includes state regulatory agencies, state chartered and federally chartered credit unions, and other important stakeholders in the state system. State chartered credit unions hold over half of the $1.87 trillion assets in the credit union system and are proud to represent nearly half of the 125 million credit union members.
 “Temporary Regulatory Relief Rule in Response to COVID–19-Prompt Corrective Action” 86 Fed. Reg. 20258 (April 19, 2021).
 86 Fed. Reg. 20261 (April 19, 2021).
 85 FR 31952 (May 28, 2020).
 See NASCUS Comments on Temporary Regulatory Relief Rule in Response to COVID-19 – Prompt Corrective Action (RIN 3133-AF19) (June 29, 2020). Available at https://www.nascus.org/comment-letters/nascus-comments-on-temporary-regulatory-relief-rule-in-response-to-covid-19-prompt-corrective-action-rin-3133-af19/.
 5 U.S.C. 553(b)(3).