(Dec. 23, 2021) Pandemic-related regulatory relief under rules on loan participations, eligible obligations, and occupancy requirements for certain properties has been extended to year-end 2022, under a temporary final rule given the green light in a unanimous notation vote by the NCUA Board this week.
The agency said the relief measures, originally approved in April 2020, are aimed at helping federally insured credit unions (FICUs) remain operational and able to address economic conditions caused by the COVID-19 pandemic.
This action continues, temporarily:
- the increase in the maximum aggregate amount of loan participations that a FICU may purchase from a single originating lender to the greater of $5 million or 200% of the FICU’s net worth;
- the suspension of limitations on the eligible obligations that a federal credit union (FCU) may purchase and hold; and
- the tolling of the required timeframes for the occupancy or disposition of properties not being used for FCU business or that have been abandoned (given the physical distancing practices necessitated by COVID–19).
The temporary revisions were originally set to expire last year-end, but Dec. 31, 2020, extended through this year. “Due to the continued impact of COVID-19, the Board has decided it is necessary to further extend the effective period of these temporary modifications until Dec. 31, 2022,” the agency stated in its notice for the Federal Register, which was set to publish Wednesday.
The provisions of this rulemaking generally take effect upon publication.
LINK:
NCUA Board Approves COVID-19 Regulatory Relief Extension
(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.”
LINK:
NASCUS Comments on Temporary Regulatory Relief Rule in Response to COVID-19-Prompt Corrective Action
(April 2, 2021) Seven policy statements issued in 2020 from late March to early June that provided temporary flexibilities to financial institutions in the areas of consumer mortgages, credit reporting, credit cards, and prepaid cards are rescinded as of April 1 (Thursday), the Consumer Financial Protection Bureau (CFPB) announced this week.
The bureau also said it was rescinding its 2018 bulletin on supervisory communications and replacing it with a revised one describing its use of matters requiring attention (MRAs) “to effectively convey supervisory expectations.” That new bulletin, 2021-01, states that “effective immediately,” the bureau will no longer use “supervisory recommendations” in these communications.
“We are now over a year into the disruptive and deadly COVID-19 crisis. The virus has affected industry as well as consumers, but individuals and families have been hardest-hit by the pandemic’s health and economic impacts,” said CFPB Acting Director Dave Uejio. “Providing regulatory flexibility to companies should not come at the expense of consumers. Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities. The CFPB’s first priority, today and always, is protecting consumers from harm.”
The rescinded policy statements were issued between March 26 through June 3, 2020, and temporarily provided financial institutions with flexibilities regarding certain regulatory filings or compliance with consumer financial laws and regulations. The bureau said the rescissions “reflect the Bureau’s commitment to consumer protection, and the fact that financial institutions have had a year to adapt their operations to the difficulties posed by the pandemic.”
The bureau, in its release, included links to each policy statement rescission notice and the new MRA bulletin.
Rescission of Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic (March 26, 2020)
Rescission of Statement on Supervisory and Enforcement Practices Regarding Quarterly Reporting Under the Home Mortgage Disclosure Act (March 26, 2020