Rodney Hood, chairman of the National Credit Union Administration, faced criticism Tuesday of using the coronavirus crisis to undo safeguards Congress put in place after the last recession.
During remote testimony before the Senate Banking Committee, Hood and other financial regulators gave updates on what their agencies were doing to help institutions navigate the pandemic. Senators focused most of their criticism on the others that testified — Comptroller of the Currency Joseph Otting, Federal Reserve Vice Chair of Supervision Randal Quarles and FDIC Chairman Jelena McWilliams — over issues such as
Still, Sen. Sherrod Brown, D-Ohio, went after Hood.
“The NCUA is also rolling back some of the very protections we put in place in response to our last financial crisis — reducing and delaying rules that protect real estate borrowers, and lowering capital and loan reserve standards that ensure that credit unions can lend in their communities during a downturn,” Brown said during the hearing Tuesday.
Brown didn’t provide additional details on which changes he thought were problematic.
However, Brown has
However, those issues predate the current crisis.
The agency has implemented a number of policies in response to the coronavirus, such as
"While this rulemaking began before the pandemic, the relief it provides, combined with the temporary appraisal relief approved during the board’s April 2020 open meeting, will benefit credit unions and borrowers during this crisis period,” Hood said in prepared remarks.
Bankers have accused credit union advocates and NCUA in recent weeks of taking advantage of the coronavirus crisis to implement new policies. Credit union lobbyists are pushing for legislation that would
Last week NCUA said it would
During Tuesday's hearing, Brown reminded the financial regulators that they have two basic jobs — to ensure the financial system is safe and strong and that money reaches those who "grow the real economy."
"You’re failing at both of those jobs," Brown said.
Toronto-Dominion Bank plans to give most employees the option to return to the office this month and is aiming for workers to officially transition to their new working models by June.
The Biden administration once again extended the pause on student loan payments enacted to help borrowers during the COVID-19 pandemic, this time through the end of August.
Employees will still have some flexibility to work from home, but are strongly encouraged to collaborate with colleagues in person, according to people familiar with the matter.
"Your responses to the pandemic seem to be more of the same, relying on the same old trickle-down economics that we have seen over and over again doesn’t work,” he added, referring to the regulators in general.
Hood received some praise from Sen. Doug Jones, D-Ala., for credit union efforts in accessing the Small Business Administration’s Paycheck Protection Program. Hood mentioned that it was particularly helpful when the
"One of the successes that we've seen with the PPP is when SBA opened that window for eight hours for those smaller community institutions,” Hood said. “That is how many of our Main Street lenders were able to get loans in the hands of small businesses.”
Hood's written testimony teased an initiative that NCUA is preparing to improve financial services in rural communities that tend to be underserved. Providing better service to these areas has been a longtime priority for Hood.
The credit union regulator also shared a slew of legislative requests. The majority of what Hood outlined has already been requested of Congress,
Still, Hood added to the list a request for a temporary reduction in minimum capital standards for federally insured credit unions. Currently to be considered well capitalized an institution needs a net worth ratio of 7%. He asked that be lowered to 6%.
To be considered adequately capitalized, a credit union needs a net worth ratio of 6%. Hood requested that be changed to 5%.
“The NCUA continues to monitor the situation on the ground to ensure we are protecting our nation’s system of cooperative credit,” Hood concluded in his remarks.
