As Prepared for Delivery on July 14, 2020
Since I last updated you in May, the NCUA has taken additional steps to protect the safety of our staff and to execute our mission as effectively and efficiently as possible.
Credit unions were well capitalized heading into the COVID-19 crisis. As of the first quarter, the aggregate net worth ratio for federally insured credit unions was robust at 11.01 percent.
In late May, the NCUA Board approved temporary changes to the agency’s prompt corrective action regulations to ensure that federally insured credit unions remain operational and liquid so that they may continue to serve their members during the pandemic.
As of the end of June, the Central Liquidity Facility’s borrowing authority stood at over $25 billion (up from $10.5 billion in April), with nearly 4,000 credit unions having access to that funding source. The CARES Act temporarily boosted the borrowing authority of the credit union system’s Central Liquidity Facility.
Over 900 credit unions participated in the Paycheck Protection Program, issuing 196,010 PPP loans in the aggregate amount of $9.7 billion. Credit union PPP loans supported 1.18 million jobs.
The NCUA and the U.S. Export-Import Bank have launched a three-year collaborative effort that will help credit unions, and their small-business members better understand and make use of EXIM guaranteed loans and resources. Helping small businesses gain access to capital is essential during the steep challenges they face in today’s challenging economic environment.
The NCUA recently broadened its approach to include members of the military when determining whether a credit union qualifies for a low-income designation, which comes with special benefits for securing affordable loans and greater access to financial services.
We are also looking at ways to improve credit union access to secondary capital, which can enable low-income credit unions to expand lending and other services to underserved communities and can serve as a basis for low-income credit unions to grow and achieve better economies of scale.
In closing, the NCUA has responded decisively to the needs of federally insured credit unions during the pandemic and is fulfilling its critical mission of protecting the safety and soundness of the system.