ALEXANDRIA, Va. (April 27, 2020) – Federally insured credit unions at the start of the COVID-19 pandemic are strong, but they may face a more difficult environment than they ever have, NCUA Board Member Todd M. Harper said.
“The good news about this pandemic-induced recession, if there is any, is that federally insured credit unions, as a whole, have started in a strong economic position,” Board Member Harper said. “At the end of 2019, the system had a net worth ratio of 11.37 percent and a delinquency rate of just 71 basis points. But, we must remain vigilant and be prepared for the economic impact that is coming.”
Harper made these remarks remotely during the Mountain West Credit Union Association’s Annual Meeting on Thursday, April 23. The full text of his remarks, including the economic indicators he is watching, is available on the NCUA’s website.
In responding to the COVID-19 pandemic, Harper urged the audience to continue the important work they are doing to support their members, small businesses, and local communities.
“A ‘people helping people’ philosophy is at the core of the credit union movement,” Harper said. “Credit unions especially need to achieve that aspiration now when working with borrowers affected by COVID-19. A credit union’s efforts to work with members in communities under stress may contribute to the strength and recovery of these communities.”
Harper outlined his five priorities for congressional action, which he said would better equip the NCUA to contain the pandemic’s economic impact. His legislative priorities include:
Harper discussed the recent regulatory and legislative enhancements made by the NCUA Board and the Coronavirus Aid, Relief and Economic Security Act to enhance the Central Liquidity Facility as the system’s liquidity backstop. He noted these changes make it easier for natural-person credit unions and corporate credit unions to join the facility and provide the system with a sustainable source of liquidity during the COVID-19 pandemic.
“Ultimately, we have a vital opportunity to significantly bolster the entire credit union system’s access to external liquidity for the remainder of the year, but we need to move quickly to capitalize on our new expanded flexibilities and position ourselves ahead of emerging needs,” Harper said. “For these reasons, I strongly encourage all consumer and corporate credit unions that do not already belong to the Central Liquidity Facility to join as soon as possible, either as regular members or through an agent.”
Credit unions can learn more about the Central Liquidity Facility at ncua.gov/CLF.
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