"Anyone who is a stakeholder — those within the credit union system and interested parties outside of it — is encouraged to provide the NCUA with comments. It is important that the NCUA understand any potential risks extreme weather events may have on the credit union system and individual credit union balance sheets. The answers we receive may also allow us to discern what tools credit unions would like to have to assist them in effectively monitoring, managing and mitigating climate-related financial risks."

While Harper and Board Member Rodney Hood voted in favor of the RFI, Vice Chairman Kyle Hauptman voted against it, citing that there are other processes and agencies that already have a focus on climate issues.

"We in D.C. don't need to tell people, for example in Puerto Rico, that they get hurricanes," Hauptman said.

Kyle Hauptman

He added, "The only reason to put the RFI out is because there's some chance that someday NCUA may take some action." Hauptman appeared to want the NCUA to stay out of any climate-related line of questioning or projecting a climate message to the industry in case it gave some credit unions pause about potential increased risk exposure that could hamper growth, for instance, in auto lending.

"I worry we might, in theory, ask credit unions for data on the share of their auto lending for electric and hybrids, sure. Someone out there might feel that this is a nudge indicating a shift towards those types of vehicles, hybrids and electric, is the better answer, the easier answer. The one that makes your exam go a little quicker," Hauptman stated.

Late Thursday afternoon, CUNA President/CEO Jim Nussle released a statement to express his concerns of the NCUA's RFI.

"It is important that credit unions have the ability and autonomy to manage their operations in a way that best serves their members. While today's action is simply a request for information, we caution against any subsequent NCUA rulemaking activity in this area. Credit unions know their members and their communities' needs best," Nussle said.

According to the NCUA, comments will be accepted for 60 days after publication in the Federal Register.

Interest Rate Ceiling Not Changing

NCUA officials with the Office of Examination and Insurance and the Office of General Counsel briefed board members after spending three months investigating and researching the safety and soundness effects if the interest rate ceiling changed from the current 18% maximum.

While the Federal Credit Union Act caps the interest rate on federal credit union loans at 15%, the NCUA board is allowed to raise the limit in 18-month increments "if interest-rate levels could threaten safety and soundness of individual credit unions."

In January, board members voted to keep the 18% rate in place through Sept. 10, 2024. At January's meeting, board members were interested in reevaluating the interest rate ceiling.

During Thursday's meeting, officials presented evidence that reverting the interest rate ceiling to 15% would have safety and soundness impacts on many individual federal credit unions. Also, raising, lowering or even going to a floating ceiling rate would be a difficult and costly administrative act for the NCUA and credit unions.

"We must always remember who ultimately feels the effects of these interest rate ceiling decisions," Harper said. "The credit union system's statutory mission is to support the saving and credit needs of all Americans, especially people of modest means. With American households under increasing financial stress from inflationary pressures and economic uncertainty, we should not place additional and unnecessary burdens on families."

He added, "To change the interest rate ceiling for federal credit unions, we must consult with certain parties like Congress, the other federal banking agencies and the Treasury Department. There is also a legal standard requiring us to determine that the prevailing interest rate levels threaten the safety and soundness of individual credit unions in several aspects."