The California and Nevada Credit Union Leagues recently filed a comment letter with the National Credit Union Administration (NCUA) regarding climate-related financial risks and will keep credit union leaders posted on this topic going forward.
As credit unions remain committed to working closely with the NCUA to effectively address climate-related financial risks and help ensure the long-term success of the industry, the Leagues told the agency it believes that additional regulations and supervisory approaches are not currently necessary.
“We recommend that the focus should instead be on fostering collaboration and knowledge sharing among credit unions, the NCUA, and industry stakeholders,” the comment letter states. “Encouraging best practices, developing educational resources, and facilitating dialogue can be far more effective in promoting climate resilience within the credit union sector than increasing an already heavy regulatory burden. By leveraging existing networks and partnerships, credit unions can continue to enhance their risk management practices and ensure the long-term sustainability of their operations.”
The Leagues’ comment letter came on the heels of April 25, when the NCUA issued a request for information (RFI) seeking public feedback on current and future climate and natural disaster risks to federally insured credit unions, related entities, their members, and the National Credit Union Share Insurance Fund (NCUSIF).
The NCUA has also sought input of any interested parties on the development of potential future guidance, regulation, reporting requirements, and/or supervisory approaches for federally insured credit unions’ management of climate-related financial risks.
The Leagues acknowledge the importance of addressing climate change and its potential impact on credit unions. Although it commends the NCUA for its proactive approach in seeking feedback and insights on this important matter, the Leagues have serious concerns regarding the RFI and respectfully offered the comments on compliance and regulatory concerns, how credit unions already recognize climate-related challenges, and considerations for the NCUA.
If you have any questions regarding the Leagues’ comments, please email Leagues Vice President of Regulatory Advocacy and Compliance Lisa Quaranta.
