World Council of Credit Unions Tuesday issued “What Credit Unions Should Know About Sustainable Finance”, a guide to help credit unions understand many of the international standards and emerging regulatory frameworks surrounding climate-related and sustainable finance issues.
World Council has been working on this issue for many years, so that international standard setters tailor regulations to accommodate the credit union cooperative model. Further, World Council has been working to position credit unions as a differentiator on ESG-related issues, while ensuring that the benefits of the member-owned, not-for-profit model are contemplated.
“The past few years have dictated the need for flexibility in all areas of our lives, and the need to adapt holds equally true for the regulatory landscape. Credit unions must be ready to undertake new sustainable finance requirements, while finding new and innovative ways to support climate resilience,” said Panya Monford, World Council Assistant General Counsel of International Advocacy.
Specifically, the publication covers:
- How global frameworks are supporting climate change and sustainability. Global authorities set global standards and thresholds by which all supplementary standard setters and regulators should abide.
- How global and international standard setters are addressing climate change through guidance and regulation. While global frameworks are concerned with climate change en bloc, global standard setters are drafting regulatory guidance and regulation that not only supports climate-related matters, but issues that affect the environment, as well as investors who desire to be informed about the environmental risks associated with their investments.
- The need for global standard setters to require regulatory authorities at the national level to adhere to proportional regulation. This will ensure that small financial institutions are not overregulated by rules that are tailored for large, systemically important banks. Generally, standard setting bodies construct the rules, while regulatory authorities (typically at the national or jurisdictional level) enforce them.
- The commitment to sustainable finance and climate-related issues by the Basel Committee, International Accounting Standards Board, G20, European Commission, Financial Stability Board and European Securities Market Authority. While these standard setters are not the only authorities involved in structuring climate-related, sustainable finance rules, they are the leading authorities shaping sustainable finance regulation.
As implementation of these final and in-progress standards are adopted at the national level, this will be an evolving and emerging area where it is critical to ensure that the credit union voice is heard.
(July 23, 2021) NASCUS President and CEO Lucy Ito sat in on two panels this week for virtual presentations associated with the World Council of Credit Unions (WOCCU) virtual annual conference.
In the first, she joined Monday in the Global Women’s Leadership Network (GWLN), which describes its mission as aiming to “provide women with the opportunity and resources to make a measurable difference in the lives of each other, in the lives of credit union members and in their communities.” Others on the panel with her (who discussed leadership and key issues facing women in the credit union system) were Teresa Freeborn, president of Kinecta FCU; Martha Majors, president and CEO of USEagle FCU, and Lisa Ginter, CEO of CommunityAmerica CU.
In the second, Ito joined WOCCU Assistant General Counsel Panya Monford, and Sophie Romana of Strategic Impact Advisors, in a Tuesday session on how proportionality by national level regulators supports financial inclusion, and providing real life scenarios that dictate the need to improve financial service efforts to serve the underserved.
(July 2, 2021) NCUA’s final rule permitting federally insured credit unions (FICUs) to extend financing of interest in connection with loan workouts and modifications is set to take effect July 30, according to the notice published this week in the Federal Register. Adopted last week by the NCUA Board, the final rule also sets documentation requirements to help ensure that the addition of unpaid interest to the principal balance of a mortgage loan does not hinder the borrower’s ability to become current on the loan, the notice states, and makes technical changes … Meanwhile, a final rule permitting FICUs to phase in over three years the day-one adverse effects on net worth of the current-expected-credit-loss (CECL) accounting methodology is set to take effect Aug. 2, according to a notice in Thursday’s Federal Register … The list of jurisdictions with strategic money laundering, and financing of terrorism and weapons of mass destruction proliferation risks has been updated by FinCEN. Haiti, Malta, the Philippines, and South Sudan were added to the list; Ghana was removed, FinCEN said … Elissa McCarter LaBorde is the World Council of Credit Unions’ (WOCCU) new president and CEO, succeeding Brian Branch who announced his retirement earlier this year. LaBorde, according to WOCCU, has more than 20 years’ experience in leading organizations that deliver financial services to underserved communities world-wide … Have a terrific (and safe) Independence Day holiday!
LINKS:
Capitalization of Interest in Connection With Loan Workouts and Modifications