As Prepared For Delivery on May 21, 2020
Thank you for that presentation and your work on this rule.
In a letter to Senate Banking Committee Chairman Crapo, I detailed a number of statutory changes that would benefit credit unions and their members amid the COVID-19 pandemic. Several of those recommendations included temporary changes to the current prompt corrective action framework to provide capital relief that require legislative action. However, the NCUA can use its existing authority provided under law to address some capital relief measures that do not require Congressional action.
Because of the pandemic, I am concerned that credit unions may temporarily fall below the well-capitalized level and become subject to various prompt corrective action requirements. This rule provides relief to those that experience a decline in their net worth ratio because of efforts to help their members or because they have experienced a rapid increase in shares because of the flight to safety. However, the rule before us today allows the agency to address problems in credit unions that pose elevated risk to the Share Insurance Fund.
The bottom line is that we want credit unions to be able to respond to the needs of their members, their employees, and their communities in the best way possible. If a credit union needs to make policy adjustments to meet the needs of borrowers who are facing stress from the crisis, we want to give them the flexibility they need under the law.