Week ahead: NCUA's Hood heads to the Hill
Rodney Hood, chairman of the National Credit Union Administration, will testify before Congress this week for the first time since the coronavirus pandemic has devastated much of the U.S. economy.
The Senate Banking Committee will hold a hearing on Tuesday focusing on how regulators have assisted in providing relief to banks and credit unions during the pandemic and how financial institutions have responded. Hood will testify at the virtual hearing, along with Comptroller of the Currency Joseph Otting, Federal Reserve Gov. Randal Quarles and FDIC Chairman Jelena McWilliams.
Both Hood and NCUA board member Todd Harper have previously written to the Senate Banking Committee outlining certain requests, such as extending temporary changes to the NCUA's Central Liquidity Facility and lifting the member business lending cap.
Adjusting the MBL cap has become a priority for credit union advocacy. Rep. Brad Sherman, D-Calif., introduced on Friday a revised version of his MBL relief bill in an effort to get it included in the next coronavirus relief package. The latest version of the legislation would eliminate the member business lending cap for a year after the national coronavirus emergency declaration is lifted. Sen. Ron Wyden, D-Ore., who serves as the ranking member of the Senate Finance Committee plans to introduce similar legislation.
"Our banking system has left the mom and pop shops on Main Street behind during this crisis,” Wyden said in a press release. “These small businesses are desperate for relief. They want to pay their employees, and they want to pay their bills so that when it's safe they can reopen their doors. They shouldn't be denied relief because they don't have an account at a big bank.”
[Ed. Wyden introduced his bill after this story was published.]
Sherman's original bill would have eliminated the MBL cap for three years. Credit union trade groups have long advocated for removing the cap and are currently arguing that these restrictions should be lifted so they can better assist their members during the coronavirus crisis.
Bankers have strongly opposed any easing of these restrictions. Banking trade groups have criticized credit unions for using the coronavirus outbreak as a chance to gain expanded lending authority and argued that crisis-specific measures, such as the Paycheck Protection Program, do not count against the cap.
NCUA joined other financial regulators in issuing a final interagency policy statement on Friday addressing the current expected credit loss standard, which is also known as CECL. Though that statement failed to address capital requirements, the credit union regulator shared that it “is considering a rulemaking that will address the potential impact to regulatory net worth.”
Finally, three elections are scheduled for this week. Nebraska will hold its rescheduled congressional primary on Tuesday while two special elections will be held to fill vacant seats in California and Wisconsin.
The Credit Union National Association is supporting Christy Smith, a Democrat, who is running in California’s 25th District for the seat of former Rep. Katie Hill, who resigned last fall. CUNA also pledged support for Tom Tiffany, the Republican nominee running in Wisconsin’s 7th District. Tiffany is seeking to fill the seat of former Rep. Sean Duffy, who also resigned last fall.