As Prepared for Delivery on April 16, 2020
Thank you to the Office of General Counsel and Examination and Insurance teams for their hard work to bring this rule to fruition in such a short timeframe. This final rule represents an additional step in our ongoing efforts to protect the safety and soundness of the credit union industry and to ensure the well-being of credit union member-owners during the COVID-19 crisis.
In maintaining my regulatory philosophy of keeping regulation effective but not excessive, this rule will temporarily relieve credit unions of regulatory burdens that might have otherwise hindered their ability to maintain operations and meet the needs of borrowers who are experiencing economic hardship. While these temporary amendments will provide credit unions with additional flexibility, they are also prudent and consistent with the NCUA’s responsibility to maintain the safety and soundness of the credit union system.
This temporary final rule amends provisions that will temporarily expand credit unions’ authority regarding purchasing loans and participations in loans, thereby promoting the extension of credit and enhancing the ability to meet liquidity needs.
The temporary final rule raises the aggregate amount of loan participations that a credit union may purchase from a single originating lender without the need for a regulatory waiver, and suspends certain limitations on the types of eligible obligations that credit unions may purchase.
The temporary final rule also addresses a regulatory requirement that may be difficult, if not impossible, for credit unions to meet during the crisis. Given social distancing policies, the temporary final rule suspends the deadlines for the occupancy or disposition of properties not being used for credit union business.
As I have made clear, the NCUA is ready, willing, and able to work with credit unions in responding to these unusual and difficult circumstances. We want to provide credit unions with the flexibility needed to adjust their policies in response to member needs. I believe this final rule represents a great opportunity to do just that. The temporary final rule temporarily streamlines our regulatory requirements without introducing undue risk.
While this temporary rule does offer relief to credit unions, I think it is important to note this will inevitably extend to borrowers as well.