Credit Unions and financial cooperatives around the world stand ready to serve their members and provide needed financial services during the Coronavirus (COVID-19) pandemic. Credit unions have proven many times that they provide much needed stability and essential services during market hardships. The coronavirus crisis will undoubtedly have significant effects on the broader economy by placing downward pressure on net income and lower net worth ratios. Credit unions, nonetheless, stand ready to play a significant role in helping members meeting their financial needs during this crisis, while operating in a safe and sound manner. The following list includes suggested recommendations for prudential regulators to consider for assisting credit unions with their financial challenges:
- Encourage credit unions to make loans with special terms and reduced documentation to affected members;
- Reschedule routine exams or provide flexibility on reporting deadlines;
- Guarantee lines of credit for credit unions through the relevant liquidity provider such as a central bank or deposit guarantee fund;
- Make loans to meet liquidity needs of credit unions through the appropriate national liquidity facility;
- Allow for the temporary provision of financial services to non-members, including emergency financial services check cashing, access to ATM networks or other services to meet short-term emergency needs (without the imposition of charges for such services that exceed its direct costs);
- Ease restrictions to allow services by correspondent banks to credit unions;
- Provide short-term grants to credit unions affected by the crisis for the purpose of emergency assistance in adjusting their operations;
- Allow flexibility for any regulation/law requiring the credit union to be open during certain days or times;
- Allow flexibility for credit unions to conduct management, board, or membership meetings via electronic means or video conference.
WOCCU acknowledges that all suggestions may not be appropriate in every jurisdiction and should be left to the discretion of the national-level regulator. WOCCU further acknowledges that all credit unions will continue to have responsibilities for any AML/CFT requirements and responsibilities. WOCCU urges regulatory flexibility for credit unions to assist the public during this crisis.
If you have questions about our comments, please feel free to contact Andrew T. Price, Esq., VP of Advocacy at firstname.lastname@example.org.